GBP/USD to go into a consolidation phase as 1.3460 support holds

GBP/USD has managed to recover to 1.3500 following Monday's decline. In the view of FXStreet’s Eren Sengezer, downside appears limited as 1.3460 support holds.

Technical outlook suggests that GBP/USD could move sideways in the near-term

“Later in the session, the ISM will release the Manufacturing PMI data for December. In case this report points to an ongoing expansion in the manufacturing sector's activity at a robust pace, risk flows could dominate the markets and allow the dollar to outperform its rivals on the back of rising yields.”

“Despite Monday's sharp decline, GBP/USD managed to hold above the 50-period SMA on the four-hour chart, which is currently acting as dynamic support at 1.3460. The Relative Strength Index (RSI) indicator on the same chart is moving sideways near 50, confirming the pair's indecisiveness.”

“In case the pair drops below 1.3460 and starts using it as resistance, the next target on the downside is located at 1.3440 (static level) before 1.3400 (static level, psychological level).”

“Resistances are located at 1.3500 (psychological level, 20-period SMA), 1.3520 (static level) and 1.3550 (December 31 high).”

See: GBP/USD to get a drift lower first regaining its sails to ride higher again – DBS Bank