|

GBP/USD Forecast: With break above $1.3850, next target is $1.4000


After reaching a new post-Brexit high of $1.3940 overnight, the GBP/USD corrected lower towards round big figure of $1.3800 just to gain back about half of the retracement to trade at $1.2860.
 
With no news on the macro calendar scheduled for Thursday, the GBP/USD is driven by market sentiment, especially concerning the US Dollar as the US is facing the government shutdown since January 19 should the US Congress fail to avert the issue by increasing the debt ceiling.
 
Technically the GBP/USD busted the resistance at $1.3850 representing 61.8% Fibonacci retracement line of post-Brexit slide lower. Although GBP/USD failed to close on Wednesday above that key resistance line, the push higher for GBP is very strong as the currency pair has managed to break above that level easily multiple time during the day.
 
The FXStreet confluence indicator that analyses multi-factor coincidence of different technical barriers points to $1.3890 as a near-term resistance on a 15-minute chart while longer-term picture sees no big barrier for GBP/USD until round big figure of $1.4000. Failure to close above $1.3850 will bring $1.4000 as next target for traders.
 
FXStreet 15 minutes and daily confluence indicators
 

 
 

With technical hurdle already busted at $1.3850, the oscillators are painting picture of a corrective move sideways with both Slow Stochastics and the Relative Strength Index moving downwards from the Overbought territory. The momentum indicator is also pointing downwards on a daily chart.
 
GBP/USD daily chart
 

 
 

Author

Mario Blascak, PhD

Mario Blascak, PhD

Independent Analyst

Dr. Mário Blaščák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

More from Mario Blascak, PhD
Share:

Editor's Picks

EUR/USD remains bid, focus stays on 1.1900

EUR/USD has broken its two-day run of losses and is ticking modestly higher on Thursday, hovering around the 1.1880 area as the US Dollar struggles to find clear direction. Weekly Initial Jobless Claims rose more than expected, taking a bit of shine off the Greenback, but markets are largely in wait-and-see mode ahead of Friday’s US CPI release.

GBP/USD sticks to the bid bias, still below 1.3700

GBP/USD is trading with decent gains around 1.3650 on Thursday. Indeed, Cable is attempting to shake off the weakness seen earlier in the week amid another choppy session for the Greenback, while a run of disappointing UK data has so far failed to derail the pair’s tentative recovery.

Gold plummets towards $4,900 as market players run into the USD

Gold plunges in the American session on Thursday, down over $150 a troy ounce in little less than an hour. Wall Street's collapse seems to be behind the ongoing US Dollar renewed strength, with the tech and the housing sectors leading the slump.

LayerZero Price Forecast: ZRO steadies as markets digest Zero blockchain announcement

LayerZero (ZRO) trades above $2.00 at press time on Thursday, holding steady after a 17% rebound the previous day, which aligned with the public announcement of the Zero blockchain and Cathie Wood joining the advisory board. 

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Aster Price Forecast: Demand sparks on Binance Wallet partnership for on-chain perpetuals

Aster is up roughly 9% so far on Thursday, hinting at the breakout of a crucial resistance level. Aster partners up with Binance wallet for the second season of the on-chain perpetuals challenge.