GBP/USD rebounds above 1.3400, holds onto modest weekly gains

• US dollar pullback late on Friday as market sentiment recovers.
• Pound is set to end the week higher versus the US dollar and above 1.3400.
• Charts continue to show weakness in GBP/USD.

The GBP/USD pair rose during the American session and recovered from 1.3406 to the 1.3470 area, trimming losses. The recovery pushed the weekly result back into positive ground.

Again cable found support at the 1.3400 area that has become a critical level. A break lower could trigger more losses, exposing the November low at 1.3351. The recovery faced resistance around 1.3500/10. The bearish bias will likely remain intact while under 1.3600.

Thanksgiving ahead

Next week economic data to be released includes the PMIs across the globe. It will be the preliminary reading of November. Also GDP data is due in Germany and the US. “The Thanksgiving holiday in the US means a short week with the data flow concentrated on Wednesday. The highlight may well be the minutes to the November 3rd FOMC meeting when the Federal Reserve announced the start of QE tapering”, explained analysts at ING.

Also market participants await news regarding the next Fed Chair. President Biden is set to announce a new term for Powell or Brainard as his replacement. In the UK, Brexit concerns are on the rise and will likely keep creating headlines next week.

Technical levels