The Great Britain Pound (GBP) inched higher against the US Dollar (USD) on Friday, increasing the price of GBPUSD to more than 1.2500 following some key economic news. The technical bias has turned bullish after the emergence of bullish pin bar a couple of days ago.
As of this writing, the pair is being traded near 1.2502. A hurdle may be noted around 1.2675 (the trendline resistance area) ahead of 1.2700-1.2706 (the high of last major upside move & psychological number) and then 1.2774 (the high of December 6th, 2016) as demonstrated in the given below daily chart
On the downside, a support can be noted around 1.2400 (the trendline support area as well as psychological number) ahead of 1.2346 (low of the bullish pin bar emerged on Tuesday) and then 1.1986 (the low of 2017). The technical bias shall remain bullish as long as the 1.2346 support area is intact.
US Building Permits Data
U.S. homebuilding fell in January as the construction of multi-family housing projects dropped, but upward revisions to the prior month’s data and a jump in permits to a one-year high suggested the housing recovery remained on track. Housing starts fell 2.6 percent to a seasonally adjusted annual rate of 1.25 million units last month, the Commerce Department said. The drop in homebuilding also may have resulted from unusually wet weather in California after years of drought. December’s starts were revised up to a rate of 1.28 million units from the previously reported pace of 1.23 million units. Homebuilding was up 10.5 percent compared to January 2016.
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.