GBP/USD: consolidates within bullish territory above 20 4hr sma at 1.2547

Currently, GBP/USD is trading at 1.2571, down -0.51% on the day, having posted a daily high at 1.2676 and low at 1.2556.

GBP/USD has been consolidating the sell-off from through the 1.2680 level overnight after the market drifted through the 1.2650 key resistance level at a snails pace in a continuation of the rally from below the 1.20 handle at the start of last week. "The US dollar is mostly firmer against the major currencies but is confined to narrow ranges," confirmed analysts at Brown Brothers Harriman, adding, "Indeed, these are well-worn ranges, but the focus has shifted to the strong advance in equities.  Yesterday, the Dow Jones Industrials finally rose through the psychologically-important 20k level, and the S&P 500 gapped higher to new record levels."

UK GDP 4Q surprises to the upside

In respect of the UK data, we saw a positive in the 4Q GDP with the economy that grew by 0.6% in the last three months of 2016, leaving full year 2016 growth of 2%. "With Brexit negotiations set to get underway we believe 2017 is going to see slower growth of around 1.4%. The BoE is expected to sit on its hands this year despite inflation rising above 3%," suggested analysts at ING Bank.

US 4Q GDP: Growth likely to register a below-trend pace - Wells Fargo

GBP/USD levels

"GBP/USD has maintained upside pressure and currently we remain unable to rule out further strength to the 1.2776 December high," explained analysts at Commerzbank, adding, "Between here and 1.2836 lies several Fibonacci retracements and major resistance and we suspect that it will struggle here. We note the TD perfected set up on the 240 minute chart and would prefer to buy on dips, dips lower are indicated to hold circa 1.2490/00."

With spot trading at 1.2572, we can see next resistance ahead at 1.2589 (Daily Classic PP), 1.2608 (Hourly 20 EMA), 1.2636 (Daily Open), 1.2636 (Monthly High) and 1.2636 (Weekly High). Support below can be found at 1.2556 (Daily Low), 1.2538 (Daily Classic S1), 1.2524 (Weekly Classic R1), 1.2512 (Daily 100 SMA) and 1.2507 (Hourly 100 SMA).