GBP/USD outlook: Cable regains traction on improved risk mode, all eyes are on Fed
|GBP/USD
Cable regained traction on Tuesday on renewed risk appetite and returned back above 1.15 handle, signaling that a shallow pullback from new multi-week high (1.1645) might be over.
Quick changes in a view of Fed’s near-future actions, continues to move markets in opposite directions, as Monday’s optimism that the US central bank will stick to its aggressive mode, started to fade on Tuesday.
Markets are quite sure that the Fed will raise its interest rate by 75 basis points on Wednesday, but again see risk of softer approach in meetings in coming months, with prevailing expectations for 50 basis points hike in December that would be negative signal for dollar.
Cable is firmer on Tuesday, but still without significant change in near-term direction, as the downside is for now protected and the action underpinned by 10/55DMA bull-cross.
However, daily studies are mixed, as bullish momentum is weakening and stochastic is heading south, but MA’s (10/20/30/55) are in bullish configuration.
Expect initial bullish signal on close above 1.15 which would require confirmation on lift above 5DMA (1.1563) though a minimum requirement to signal bullish continuation will be sustained break above recent tops at 1.1645 that would expose next pivot at 1.1721 (100DMA).
Conversely, failure to hold gains above 1.15 would soften near-term structure and risk attack at converged 10/55DMA’s.
Market will focus on signals from Fed which is likely going to be a key driver in coming sessions.
Res: 1.1613; 1.1645; 1.1732; 1.1752.
Sup: 1.1459; 1.1429; 1.1339; 1.1308.
Interested in GBP/USD technicals? Check out the key levels
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