Richard Perry
Independent Analyst
GBP/USD
Cable tentatively fell into the close yesterday on the news of UK Prime Minister Johnson being admitted to intensive care in hospital with Coronavirus. However, the sterling decline has only proved to be short-lived overnight as recovery has set in. We hope the same for the Prime Minister in due course. However, the technical outlook for Cable retains a mild negative bias with the legacy of Friday’s decisive negative candle still the over-riding near term signal that is a drag on the outlook. A failure to recover through overhead supply $1.2300/$1.2350 suggest s downside bias towards an initial implied target of $1.2130.and potential retreat towards the 38.2% Fibonacci retracement (of $1.3200/$1.1405) at $1.2090 in due course. Momentum indicators beginning to fall over will be a concern too, with the RSI faltering under 50 and more pertinently, the Stochastics threatening to bear cross for a sell signal. An overnight rebound has left initial support at $1.2160 but a failure to build on this rally overnight through $1.2300 would be a renewed sell signal as a run of lower highs and lower lows is beginning to form. Today’s session could be key for the near to medium term outlook of Cable.
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