GBPUSD outlook: Bears take a breather ahead of US job report

Slobodan Drvenica Windsor Brokers

GBPUSD

Cable edges higher in early Friday as traders collect profits after bearish acceleration below 1.15 handle in past two days found footstep at solid Fibo support at 1.1150 (38.2% of 1.0348/1.1645).

The pound is weighed by BoE’s gloomy outlook for the economy, while the most recent hawkish tones from Fed suggest that the US central bank will remain in aggressive mode in policy tightening.

A brief optimism that the Fed may slow the pace in hiking rates was dampened by the remarks from Chair Powell, who said that it was still premature to discuss the possible pause in rate increases.

Markets focus on the US October job report, which is expected to show the lowest hiring in nearly two years and a moderate increase in wages, suggesting some loosening in labor market that may add to hopes of Fed’s smaller rate hike in December and cause increased volatility.

Weakened daily studies (MA’s in bearish setup and rising negative momentum), add to bearish near-term bias, though bears still look for confirmation on clear break of 1.1150 pivot that would risk drop towards key supports at 1.10 zone (daily cloud base / psychological) and 1.0922 (Oct 12 trough) in extension.

Upticks should stay capped under 20DMA / daily cloud top (1.1314/21) to keep near-term bears in play.

Res: 1.1242; 1.1321; 1.1376; 1.1412.
Sup: 1.1150; 1.1060; 1.1000; 1.0922.

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.1611
2. R2 1.1517
3. R1 1.134
PP 1.1246
1. S1 1.107
2. S2 1.0975
3. S3 1.0799

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.

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