GBP/USD Forecast: Buyers turn hesitant as 1.2870 resistance holds
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADE- GBP/USD lost its recovery momentum after meeting resistance at 1.2870.
- Pound Sterling captures capital outflows out of the Euro on Tuesday.
- Stiff support seems to have formed at 1.2800.
GBP/USD climbed to a daily high near 1.2870 in the early European morning on Tuesday but failed to preserve its bullish momentum. 1.2800 aligns as key support for the pair and a drop below that level could trigger a technical selloff.
The upbeat market mood on Chinese stimulus optimism made it difficult for the US Dollar (USD) to find demand during the Asian trading hours and allowed the pair to stage a rebound following a 7-day losing streak.
After the data from the euro area revived concerns over a recession in Germany, the Euro came under renewed selling pressure. The sharp decline seen in EUR/GBP cross suggests that Pound Sterling captures some of the capital outflows out of the euro, helping GBP/USD hold its ground for the time being.
The Conference Board will release the Consumer Confidence Index for July. Ahead of the Federal Reserve's two-day policy meeting that will commence later in the day, however, investors are likely to refrain from taking large positions.
In the meantime, US stock index futures trade mixed in the European session on Tuesday. A bullish opening in Wall Street in anticipation of positive earnings figures from tech giants Microsoft and Google Alphabet could limit the USD's gains.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart retreated to 40 following a recovery toward 50 earlier in the day, reflecting buyers' hesitancy.
On the downside, 1.2800 (200-period Simple Moving Average (SMA), Fibonacci 61.8% retracement of the latest uptrend) aligns as key support. A 4-hour close below that level could open the door for an extended decline toward 1.2730 (static level).
GBP/USD's latest rebound confirmed 1.2870 as strong resistance. In case the pair rises above that level starts using it as support, 1.2900 (psychological level, 100-period SMA) and 1.2930 (Fibonacci 38.2% retracement) could be seen as next bullish targets.
- GBP/USD lost its recovery momentum after meeting resistance at 1.2870.
- Pound Sterling captures capital outflows out of the Euro on Tuesday.
- Stiff support seems to have formed at 1.2800.
GBP/USD climbed to a daily high near 1.2870 in the early European morning on Tuesday but failed to preserve its bullish momentum. 1.2800 aligns as key support for the pair and a drop below that level could trigger a technical selloff.
The upbeat market mood on Chinese stimulus optimism made it difficult for the US Dollar (USD) to find demand during the Asian trading hours and allowed the pair to stage a rebound following a 7-day losing streak.
After the data from the euro area revived concerns over a recession in Germany, the Euro came under renewed selling pressure. The sharp decline seen in EUR/GBP cross suggests that Pound Sterling captures some of the capital outflows out of the euro, helping GBP/USD hold its ground for the time being.
The Conference Board will release the Consumer Confidence Index for July. Ahead of the Federal Reserve's two-day policy meeting that will commence later in the day, however, investors are likely to refrain from taking large positions.
In the meantime, US stock index futures trade mixed in the European session on Tuesday. A bullish opening in Wall Street in anticipation of positive earnings figures from tech giants Microsoft and Google Alphabet could limit the USD's gains.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart retreated to 40 following a recovery toward 50 earlier in the day, reflecting buyers' hesitancy.
On the downside, 1.2800 (200-period Simple Moving Average (SMA), Fibonacci 61.8% retracement of the latest uptrend) aligns as key support. A 4-hour close below that level could open the door for an extended decline toward 1.2730 (static level).
GBP/USD's latest rebound confirmed 1.2870 as strong resistance. In case the pair rises above that level starts using it as support, 1.2900 (psychological level, 100-period SMA) and 1.2930 (Fibonacci 38.2% retracement) could be seen as next bullish targets.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.