GBP/USD Outlook: Bulls Lack Strength Under 1.36 amid Risk-off sentiment

• GBP/USD remains under pressure below 1.3600.
• Russia-Ukraine tension remains the key driver of the market.
• Brexit concerns continue to weigh on the pound.
• Market participants are eying US initial jobless claims and US building permit data.

The GBP/USD outlook remains neutral as the risk sentiment is not clear yet, while the USD is also directionless at the moment.

Today, the GBP/USD price is trading below 1.3600 in Europe, under moderate downward pressure. Russian officials said Wednesday that if UK sanctions were imposed against Moscow over the conflict in Ukraine, they would retaliate.

After a new study found that many companies don’t feel the EU trade deal helps them grow or boost sales in Europe, many are turning to the government for help exporting.

According to a survey of 1,000 businesses by the British Chambers of Commerce (BCC), it caused increased costs, paperwork, delays and placed the UK at a competitive disadvantage.

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The markets are becoming more receptive to shared risks as the Russians say one thing and NATO and the US say Russian troops are moving near Ukraine’s border, and a de-escalation does not seem to be taking place. As a result, the deception is likely to continue until Russia de-escalates and/or invades Ukraine.

Yesterday’s Federal Reserve minutes added little to the overall body of knowledge on Federal Reserve policymakers’ intentions to raise interest rates and reduce the balance sheet size. It is widely expected that rates will rise in March, but the market is divided over whether the Fed will move 25 basis points or 50 basis points.

However, these minutes suggest that the US markets enjoyed a positive moment because there wasn’t a significant quorum of politicians for a 50-basis point rate hike.

Currently, the Dollar Index is trying to break back above the 96.00 resistance level. Upon reaching 96.25, the US Dollar Index will move upwards, bearish for GBP/USD.

The focus today will be on economic data from the US. According to the initial jobless claims report, 219,000 Americans applied for unemployment benefits this week. Currently, there are 1.62 million jobless claims. However, this number is expected to fall to 1.61 million.

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According to analysts, the housing market will decline 0.5%m/m in January after rising 1.4% in December. In addition, it is expected that building permits will decrease by 4% m/m.

GBP/USD price technical outlook: Bulls vs. bears to continue

The GBP/USD price regained momentum from the intraday lows around 1.3550. However, the upside bias is not clear yet as the price is still below the 1.3600 mark and the previous price bar closed off the highs with a very high volume. As the price is above the key moving averages on the 4-hour chart, the traders may be betting on bulls above the 1.3600 level. The broader sentiment remains neutral, with an expected oscillation between 1.3500 to 1.3600.