Next stop 1.4000 or 1.4200?
|GBPUSD, H4 and Weekly
Sterling continues to be one of the strongest currency on the day, posting a near 0.5% average gain versus the dollar, euro and yen. Cable traded for 3rd consecutive day above the 61.8% recovery since Brexit Sell of, and above the 50% recovery since 2015 peak. With the dollar coming back under pressure, led by a rebound in EURUSD, after posting fresh recovery during the Asian session, GBPUSD is traded above February’s 2016 support, at 1.3850. The 1.3850 level has been tested several times since yesterday, hence the break above that could be consider significant for pair’s future performance.
By observing the Daily and weekly time-frame of Cable, we have noticed that upper Bollinger Bands keep extending its pattern in both time-frames, suggesting that bulls are in major control of the pair. In the weekly time-frame the pair is well supported by the 20-weeks MA since April 2017, while in the Daily time-frame the price action moves above 200-Day SMA since June 2017. This wider picture of the pair along with Daily momentum indicators, remaining positive, suggests that Cable is likely to test the round 1.4000 level, which is in the mid of 50 and 61.8 Fibonacci level since 2015. The Daily MACD remains positive since November, while RSI is at 75, indicating that there is further upwards space. Therefore a break and hold above 1.4000 would provide further positive momentum, with the next resistance level at the confluence of 200-Weekly MA and the 61.8% Fibonacci level, at 1.4230.
In shorter time frame, significant was the break of the strong resistance at 1.3850. Therefore an entry was taken on the break of this level, with target at yesterday’s high, at 1.3950. Support area was set between 20-period MA, at 1.3800 and 1.3770. The Bollinger Bands extending their upper line in the intra-day picture as well, while the pair is forming high highs and higher lows since January 11. Intra-day Momentum indicators configurated positively, with Stochastic above neutral, positive MACD and RSI reaching 70 and sloping further up, giving further bullish signals for today.
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