Daily technical and trading outlook – GBP/USD

Daily GBP/USD technical outlook

Last Update At 20 May 2022 00:48GMT

Trend daily chart

Down

Daily indicators

Rising fm o/s.

21 HR EMA

1.2452

55 HR EMA

1.2420

Trend hourly chart

Near term up.

Hourly indicators

Bearish divergences.

13 HR RSI

55

14 HR DMI

+ve

Daily analysis

One more rise b4 strg retreat.

Resistance

1.2581 - May 05 European high.
1.2535 - 38.2% r of 1.3147-1.2156.
1.2524 - Thur's near 2-week high.

Support

1.2435 - Wed's NY high (now sup).
1.2394 - Thur's European morning high (now sup).
1.2330 - Wed's low.

GBP/USD - 1.2461.. Although cable swung sideways in tandem with euro on Thur, price caught a bid at 1.2339 in early European trading n rallied abv Wed's 1.2501 high to 1.2524 in NY morning b4 retreating on profit taking.

On the bigger picture, despite cable's brief break of 2016 post-Brexit low of 1.1491 to a near 35-year trough of 1.1412 in mid-Mar 2020 on safe-haven usd's demand following free fall in global stocks, price rallied to 1.3686 on the last trading day of 2020 following a last-minute EU-UK trade deal, then to a near 34-month 1.4241 peak in late Feb suggests a major low is made. Despite hitting a 3-year peak of 1.4250 on Jun 01, selloff to as low as 1.3162 in Dec signals long-awaited correction has occurred. Cable's fall to 1.3000 in Mar, then to a 23-month trough of 1.2156 last Fri would extend twd 1.2000, reckon 1.1959 shoud hold. Cable's rally abv 1.2412 Tue may head twd 1.2638 b4 down.

Today, although Thur's gain to a near 2-week high of 1.2524 suggests upmove fm May's 23-month bottom at 1.2156 may extend marginal gain, 'bearish divergences' on hourly indicators would prevent strg rise abv 1.2535 n yield decline later today. Below 1.2394 signals top made n heads twd 1.2330 on Mon.