GBPUSD Outlook: Sterling likely to follow direction signal from post-ECB Euro
|GBP/USD
Cable is moving in directionless and narrow-range mode in early European trading on Thursday, awaiting ECB's decision which would influence pair's near-term action.
Sterling stands at the back foot following triple-failure to clear Fibo barrier at 1.2370 (50% retracement of 1.2783/1.1958), but remains within daily cloud, as cloud base (1.2304), reinforced by broken 55DMA, keeps the downside protected for now.
Wednesday's bearish close formed bearish engulfing pattern, initial negative signal which needs confirmation on today's close.
Fading bullish momentum and daily stochastic reversing from overbought territory, add to negative signals, however, sterling is likely to follow the Euro after ECB.
Initial bearish signal could be expected on break below daily cloud base, for test of rising 10DMA (1.2251) and initial reversal signal expected on break and close below 1.2221 (Fibo 38.2% of 1.1958/1.2384, reinforced by rising 20DMA).
Conversely, bulls are expected to re-take control on lift above 1.2370/84 (Fibo barrier/Monday's high) that would expose upper pivot at 1.2431 (daily cloud top).
Res: 1.2342; 1.2370; 1.2384; 1.2431
Sup: 1.2304; 1.2283; 1.2251; 1.2221
Interested in GBP/USD technicals? Check out the key levels
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.