That Pound is among the strongest currencies across the board is undeniable: the GBP/USD trades near a multiyear high posted at 1.7179 last week, and so far retracements had been shy of 100 pips from it. The main reason beyond such strength is the Central Bank imbalance: with rates at record lows and facility programs amongst major economies, the fact that the UK is doing pretty well fuels speculation the kingdom will be the first to move rates up. Not to mention, BOE’s governor Carney shocked markets a couple weeks ago stating that a rate hike may come sooner than what markets expect. Later he recanted of the bold statement, but the damage was done.
The long term outlook for GBP/USD is still bullish, and downward movements are understood mostly as corrective, giving buying opportunities rather than suggesting a top is in place: there’s a long way down before the pair can confirm a trend reversal, most likely a break below 1.6880, 61.8% retracement of the latest bullish run.
But in the short term, a mild bearish tone prevails according to the 4 hours chart that shows indicators turning south below their midlines, and price capped below its 20 SMA. 1.7060 is the immediate support as if below, the downward potential may extend down to 1.7000 price zone. On the other hand, a recovery above 1.7150 is needed to revert the short term negative tone, and see a quick recovery towards 1.7180, in route to 1.7220 price zone.
View Live Chart for GBP/USD
The long term outlook for GBP/USD is still bullish, and downward movements are understood mostly as corrective, giving buying opportunities rather than suggesting a top is in place: there’s a long way down before the pair can confirm a trend reversal, most likely a break below 1.6880, 61.8% retracement of the latest bullish run.
But in the short term, a mild bearish tone prevails according to the 4 hours chart that shows indicators turning south below their midlines, and price capped below its 20 SMA. 1.7060 is the immediate support as if below, the downward potential may extend down to 1.7000 price zone. On the other hand, a recovery above 1.7150 is needed to revert the short term negative tone, and see a quick recovery towards 1.7180, in route to 1.7220 price zone.
View Live Chart for GBP/USD
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