GBP/USD outlook: Rises on weaker dollar, bulls look for confirmation on close above thick daily cloud

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable accelerates higher on Thursday, lifted by weaker dollar as markets are still not sure what the Fed will decide in the next week’s policy meeting.

The latest surprises from RBA and BOC raise hopes that the US central bank would opt for another 25 basis points hike, against signals of pause in hiking cycle, although it is still unclear what the US policymakers will decide.

Fresh strength emerges again above the top of rising daily cloud following false breaks higher in past two days but needs to sustain gains above the cloud and close above 1.2493 pivot (50% retracement of 1.2679/1.2307 / daily Kijun-sen) to generate fresh direction signal after two consecutive long-legged daily Doji candles signaled strong indecision.

Improving daily studies (14-d momentum is back to positive territory / MA’s turning to bullish configuration) support the action, however, another failure to clearly break out from rising and thickening daily cloud would weaken near-term structure and keep the downside vulnerable.

Res: 1.2431; 1.2472; 1.2493; 1.2544.
Sup: 1.2450; 1.2435; 1.2397; 1.2368.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2598
2. R2 1.2549
3. R1 1.2493
PP 1.2444
1. S1 1.2388
2. S2 1.2339
3. S3 1.2283

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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