GBPUSD holds in red for the fourth straight day; dovish BoE Carney dampened hopes for rate hike in May
|GBPUSD
Cable hit new two-week low at 1.4044 on Friday, in extension strong fall from Thursday, when pound was hit by comments from BoE Governor Carney. The pair remains firmly in red for the fourth consecutive day and puts broader bulls under increased pressure, as today’s fresh extension lower broke below the lower boundary of bull-channel from 1.3711 and so far retraced 50% of 1.3711/1.4376 upleg.
Daily techs weakened as 10/20/30MA’s turned to bearish setup and falling 14-d momentum is attempting into negative territory.
The pair is also on track for strong bearish weekly close which is seen as negative signal.
Series of downbeat key data from UK this week (wages; CPI; retail sales) increased pressure on sterling as initial expectations for BoE rate hike in the next meeting in May faded.
Additional pressure came from BoE Governor Carney who dampened wide rate hike expectations on Thursday, saying that there were other CB meetings this year, signaling that BoE wouldn’t act in May.
Pound spiraled in late Thursday’s trading after Carney’s comments and holds firmly in red at the beginning of European trading on Friday.
Bears look for test of psychological 1.40 support, reinforced by sideways-moving 55SMA and possible extension towards key near-term barrier at 1.3965 (04 Apr trough / Fibo 61.8% of 1.3711/1.4376 ascend).
Oversold slow stochastic on daily chart signals bear may take a breather before resuming. Broken channel support line marks initial resistance at 1.4079, reinforced by 30SMA (1.4092), with extended upticks to be capped by strong barriers at 1.4030 zone (20SMA / base of thick 4-hr cloud).
Res: 1.4076; 1.4092; 1.4130; 1.4189
Sup: 1.4010; 1.4000; 1.3965; 1.3944
Interested in GBPUSD technicals? Check out the key levels
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