GBP/USD outlook: Bulls are taking a breather after five-day rally

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable eases from new multi-week high (1.2700) on Thursday, as bulls faced headwinds from significant resistances at 1.2700 zone, provided by the top of daily Ichimoku cloud and Apr 9-10 tops.

In addition, overbought conditions on daily chart prompted traders to partially collect profits from a five-day rally, which accelerated after US inflation data on Wednesday (GBPUSD advanced 0.8% for the day, in the biggest one-day gains since Apr 29).

Dips are likely to be shallow (so far held by broken Fibo 61.8% and daily cloud base) as overall picture is bullish (strong positive momentum / MA’s in bullish setup) and mark positioning for continuation of a larger uptrend from 1.2299 (Apr 22 low).

Broken 100DMA (1.2632) marks next support, followed by 55DMA (1.2601) and key supports at 1.2550/40 zone (Fibo 38.2^% of 1.2299/1.2700 / 200DMA) which should contain extended dips and keep larger bulls in play.

Risk-sensitive pound received fresh support from softer than expected US inflation numbers which may push the US central bank one step closer to eventual start of policy easing, as well as comments from some MPC hawks who favor unchanged BOE rates.

Markets await release of US weekly jobless claims, with last week’s figure above consensus (219K) to provide fresh tailwinds and push the price above pivotal 1.2700 barrier.

Res: 1.2700; 1.2709; 1.2753; 1.2784.
Sup: 1.2632; 1.2601; 1.2569; 1.2540.

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

1. R3 1.2823
2. R2 1.2755
3. R1 1.272
PP 1.2652
1. S1 1.2617
2. S2 1.2549
3. S3 1.2514

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 onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

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.