The low level of liquidity due to the Christmas holidays is expected to impact the whole FX market and GBPUSD doesn’t make exception from the rule. We can expect a very low level of activity thus the GBPUSD can be stuck inside a very tight range with key support level at 1.2360 and resistance at 1.2500 big psychological number. A break above 1.2500 will open up the door for a retest of 1.2560 intraday resistance.
The stochastic indicator is in oversold territory and the two week sell off is expected to take a pause. The UK economic calendar looks mild and no major risk event is on the docket with the exception of the GDP revision data for the third quarter. The UK third quarter GDP growth is expected to be confirmed at 0.5%. The risk remains to the downside and a miss in the GDP figure can actually be positive for an already very strong US Dollar.
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