GBP/USD outlook: Bears crack key supports and look to continue larger downtrend

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable extends weakness into the fourth straight day and tested key support at 1.3670 (Mar 25 low / 100DMA) in early European trading on Friday.

Bears emerged from daily cloud (cloud base lays at 1.3712) after trading within thick cloud for two weeks, generating bearish signal for extension of six-week downtrend from 1.4238 (2021 high) which requires confirmation on weekly close below 1.3670 pivot.

Cable is weighed by the issues with AstraZeneca vaccine as the EU imposed certain age restrictions for the vaccine but left to the member countries to decide, with rising violence in the Northern Ireland additionally pressuring pound.

Firm break of 1.3670 would expose next pivotal support at 1.3641 (Fibo 38.2% of 1.2675/1.4238 upleg), violation of which would confirm signal for bearish continuation.

Negative daily studies support the action but oversold stochastic and subsequent bounce after testing 1.3670 support suggest bears may take a breather before resuming.

Broken 10DMA (1.3784) should cap upticks and maintain bearish bias, while extension and close above 20DMA (1.3810) would sideline bears.

Res: 1.3750; 1.3784; 1.3810; 1.3839.
Sup: 1.3700; 1.3670; 1.3641; 1.3609.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.3834
2. R2 1.3808
3. R1 1.377
PP 1.3745
1. S1 1.3707
2. S2 1.3681
3. S3 1.3643

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD challenges 1.1800, two-week lows

EUR/USD remains on the defensive, extending its leg lower to the vicinity of the 1.1800 region, or two-week lows, on Tuesday. The move lower comes as the US Dollar gathers further traction ahead of key US data releases, inclusing the FOMC Minutes, on Wednesday.

GBP/USD looks weaker near 1.3500

GBP/USD adds to Monday’s pessimism and puts the 1.3500 support to the test on Tuesday. Cable’s marked pullback comes in response to extra gains in the Greenback while disappointing UK jobs data also collaborate with the offered bias around the British Pound.

Gold loses further momentum, approaches $4,800

Gold recedes to fresh two-week troughs around the $4,800 region per troy ounce on Tuesday. The precious metal builds on Monday’s downtick following a marked rebound in the US Dollar and mixed US Treasury yields across the board.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.