Mixed Footing for Sterling
|GBPUSD, H1
Sterling has started the new week on a mixed footing, up versus the yen, down versus the euro while sitting at near net unchanged levels versus the dollar. Cable edged out a two-session low earlier, during a broader rebound in the dollar, at 1.3993, and has since worked back to levels around 1.4020-30, which is near the midway point of the range that’s been seen over the last month. Support at 1.3935, which is the 200-period SMA in the 1-hour chart and the mid point of the S1 and S2 as provided by the Pivot Point analysis for today.
The technical indicators now support that the short-term bias is neutral, with RSI and Stochastic pivoting around 50, while MACD lines are below neutral. Hence the pair might be seen entering a consolidation mode. Also, the 50-period simple moving average and 200-period SMA have flattened, suggesting as well that the pair might consolidate for a while.
However, if prices manage to fell below the 38.2% Fibonacci level and the recent swing low, at 1.3980 a trend reversal to the downside in the short term could be near in time. The immidate support comes at the 200-period SMA, at 1.3635. To the upside, immediate resistance could come from the confluence of 50% Fibonacci and 50-period SMA at 1.4050, ahead of the 61.8% Fibonacci at 1.4120.
The UK data calendar is relatively busy this week, highlighted by the February CBI surveys on industrial trends and the retail sales (Tuesday and Thursday, respectively), labor data coving December and January (Wednesday), and the second estimate of Q4 GDP (Thursday). Brexit negotiations, now at the sharp end, are ongoing, and will continue to be a font of potential volatility for sterling.
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