Daily Technical Outlook on Major - GBP/USD

Trend Daily Chart
Up

Daily Indicators
Bearish divergences

21 HR EMA
1.3786

55 HR EMA
1.3753

Trend Hourly Chart
Up

Hourly Indicators
Bearish divergences

13 HR RSI
70

14 HR DMI
+ve

Daily Analysis
Resumption of recent uptrend

Resistance
1.3893 - 80.9% proj. of 1.2589-1.3659 fm 1.3027
1.3875 - 61.8% proj. of 1.3538-1.3770 fm 1.3732
1.3836 - Asian fresh 1-1/2 year high

Support
1.3742 - Y'day's low
1.3725 - Mon's low
1.3693 - Fri's NY morning high (now sup)

• GBP/USD - 1.3826.. Sterling met renewed selling at 1.3806 in Asia y'day n dropped sharply in Europe on soft UK inflation data eased n hit session lows of 1.3742 in European morning b4 staging a bounce back to 1.3800 in late NY trade.

• On the bigger picture, cable's erratic rise after 'flash crash' to 2016 31-year bottom of 1.1491 in Oct to 1.2775 (Dec), then strg gain to Sep's 14- month peak at 1.3659 confirms a major low is made. Last Fri's rally abv 1.3659 to a 1-1/2 year high of 1.3744 confirms said uptrend has resumed after nearly 4 months of broad sideways swings n price is en route to 1.3893 (80.9% proj. of intermediate rise fm 1.2589-1.3659 measured fm 1.3027), however, 'bearish diver- gences' on the daily indicators should cap price below psychological res 1.4000. On the downside, only a weekly close below 1.3659 (prev. high, now sup) signals temporary top is made n may risk stronger retracement twd 1.3458.

• Today, cable's intra-day break abv Mon's 1.3820 high on renewed U.S. govt. shutdown concerns confirms recent upmove has resumed, however, 'bearish divergences' on hourly indicators would prevemt strg gain n reckon 1.3875/85 woudl cap upside n bring correction. Below 1.3750/60 risks 1.3742, 1.3725.

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