GBP/USD Forecast: traders await a decisive breakthrough 2-week old trading range

Haresh Menghani FXStreet

On Wednesday, the ongoing US Dollar upsurge exerted some initial selling pressure around the GBP/USD pair, albeit once again failed to push it through the 1.3450 support area. Mixed US economic data prompted some USD profit-taking and helped the pair to defend a near-term trading range support, held over the past two weeks.

The British Pound got an additional boost from reports, saying that the UK is prepared to stay in the customs union beyond 2021. The pair jumped back to the very important 200-day SMA during the Asian session on Thursday but lacked any strong follow-through. Surging US Treasury bond yields, which tends to underpin the greenback demand, might continue to keep a lid on any meaningful up-move for the major amid empty UK economic docket.

Later during the early NA session, the second-tier US data - the usual weekly initial jobless claims and Philly Fed Manufacturing Survey for May would be looked upon to grab some short-term trading opportunities.

Technically, the pair lacks any firm near-term directional bias and remains confined in a broader trading range. Hence, traders are likely to wait for a decisive break through the near-term trading range before positioning for the next leg of directional move.

From current levels, any subsequent up-move is likely to confront strong resistance near the 1.3600-1.3610 region, above which a bout of short-covering could lift the pair back towards a medium-term ascending trend-line support break-point, now turned resistance, near mid-1.3600s. A follow-through buying now seems to assist the pair to easily surpass the 1.3700 handle and aim towards testing its next resistance near the 1.3750-55 region.

On the flip side, weakness below the key 1.3500 psychological mark might continue to find strong support near mid-1.3400s, coinciding with 38.2% Fibonacci retracement level of the 1.1987-1.4377 strong up-move. A convincing break below the mentioned support would point to a fresh bearish breakdown and pave the way for an extension of the pair’s prior depreciating slide, initially towards the 1.3400-1.3390 horizontal support and eventually towards the 1.3310-1.3300 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.