GBP/USD outlook: Bullish bias above rising daily cloud

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable remains at the front foot and extends recovery on Friday morning, after fresh bulls registered break and close above the top of rising daily cloud.

Fading US recession fears and solid Chinese economic data revived risk sentiment while sterling gets support from diverging US/UK monetary policies (bets for the size of Fed rate cuts this year went well above expectations for BoE’s action) keeping pound underpinned.

Fresh gains cracked barriers at 1.2754/60 (Fibo 23.6% of 1.3044/1.2664 / falling daily Tenkan-sen), with daily close above these levels to boost developing bullish signals on formation of reversal pattern on daily chart.

Mixed daily studies lack clearer direction signal (negative momentum / mixed setup of MA’s / north-heading RSI).

Near term bias is expected to remain with bulls while the price stays above rising daily cloud, but extension through pivotal barriers at 1.2780 / 1.2810 (55DMA / Fibo 38.2%) is needed to confirm signal for recovery continuation.

Conversely, penetration of daily cloud (top lays at 1.2715) would weaken near-term structure and expose lower pivots at 1.2685/58 (converging 100/200DMA’s) loss of which will be bearish.

Res: 1.2739; 1.2760; 1.2780; 1.2815.
Sup: 1.2754; 1.2715; 1.2685; 1.2658.

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

1. R3 1.2865
2. R2 1.2809
3. R1 1.2777
PP 1.2721
1. S1 1.269
2. S2 1.2634
3. S3 1.2603

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.

GBP/USD retreats below 1.3350; Fed Minutes in focus

GBP/USD struggles to find its footing and trades in negative territory below 1.3350, pressured by the renewed USD strength. US President Donald Trump said on the MoU signed with Iran to end the conflict was "over", causing safe-haven flows to dominate the action in financial markets. Later in the American session, the Fed will publish the minutes of the June policy meeting.

EUR/USD tests 1.1400 as USD gathers strength on Trump comments

EUR/USD comes under bearish pressure on Wednesday and declines toward 1.1400. US President Trump said the MoU signed with Iran to end the conflict was "over" and added that the didn't want to engage with Tehran anymore, triggering a flight-to-safety and boosting the USD.

Gold drops below $4,100 as Middle East tensions escalate

Gold turns south on Wednesday and trades deep in negative territory near $4,050 on Wednesday. Investors adopt a cautious stance and help the USD gather strength after US President Trump said at the NATO summit that the MoU signed with Iran to end the conflict was "over" and added he didn't want to engage with Tehran.

Pi Network crashes to a record low amid broader market stress

Pi Network (PI) price edges toward $0.1000 extending losses for the fifth straight day. Retail sentiment remains bearish as Open Interest and the funding rate decline. The technical outlook for PI is bearish as selling pressure mounts, despite oversold conditions.

WTI surges above $74 as Trump confirms MoU with Iran is over

West Texas Intermediate (WTI) soars 3.2% to near $74.30 during the European trading session, the highest level seen in two weeks. The oil price surges as the confirmation, from the US President Donald Trump that the MoU with Iran is over, has revived risks of global energy supply disruption.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.