GBP/USD outlook: Extended sideways mode expected while 20DMA holds
|GBP/USD
Cable edged lower in early US trading on Monday but remains positive for the day. Near-term action holds above 20 DMA for the second day, underpinned by formation of 10/20DMA's bull cross that reduces negative impact from Friday's bearish daily candle, which generated an initial signal of possible end of four-day congestion. Daily studies are mixed (rising bullish momentum / falling stochastic/mixed MA's / flat RSI) lacking clearer signal, but the action is weighed by weekly cloud and converging 55/200DMA's in attempt to form death-cross. Close below 20DMA (1.2175) is required for initial bearish signal, with extension below key Fibo support at 1.2074 (38.2% of 1.1409/1.2485) to signal reversal. Extended sideways mode could be expected while 20DMA holds, while clear break above lower platform at 1.2485 would signal bullish continuation.
Res: 1.2327; 1.2345; 1.2421; 1.2485
Sup: 1.2209; 1.2175; 1.2131; 1.2100
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