GBP/USD Analysis: remains on the back foot

Dukascopy Bank Team Dukascopy Bank SA

“Uncertainty surrounding the UK’s Brexit negotiations and the potential impact of a Donald Trump presidency on US monetary and fiscal policy have been the key drivers of the recent move. Against this backdrop, domestic data have played second fiddle.”

– Lloyds Bank Commercial Banking (based on PoundSterlingLive)

Pair’s Outlook
The Sterling surprised with its performance on Tuesday, as it managed to unexpectedly recover from its intraday low yesterday and even ended the day in the green zone. However, the Pound lacked the strength to climb over the weekly S1, which was the immediate resistance at 1.2184. The weekly S1 retains its role of the nearest resistance today, expected to trigger more weakness. Technical indicators are also in favour of the negative outcome, as they are now giving bearish signals. The support cluster around 1.2120, formed by the Bollinger band and the monthly S1, is likely to limit the losses today, as it has with Monday’s and Tuesday’s volatility.
Traders’ Sentiment
Bulls keep getting stronger, with 72% of traders holding long positions (up from 71%). Meanwhile, the share of sell orders slid from 57 to 53%.

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.2286
2. R2 1.2238
3. R1 1.2203
PP 1.2155
1. S1 1.2121
2. S2 1.2073
3. S3 1.2038

Author

Dukascopy Bank Team

Dukascopy Bank SA

Dukascopy Bank stands as an innovative Swiss online banking institution, with its headquarters situated in Geneva, Switzerland.

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