GBP/USD outlook: Bulls regain traction but more evidence needed to signal reversal
GBP/USD
Cable regained traction on Friday after negative tone prevailed during this week, with three-day drop ending with a hammer candle that generated initial bullish signal.
Fresh advance nearly fully reversed losses of this week but needs lift above pivotal barriers at 1.3887/97 (falling 20DMA / Fibo 61.8% of 1.4001/1.3731 bear-leg) to confirm reversal signal and open way for stronger recovery.
Formation of bullish engulfing today would add to positive tone, but stall of 19-d momentum rally on approach to centreline and subsequent descend, warn that recovery may run out of steam.
Caution on return and close below 10DMA (1.3819) which would weaken near-term structure and keep the downside at risk.
Res: 1.3866; 1.3887; 1.3897; 1.3937.
Sup: 1.3834; 1.3819; 1.3794; 1.3741.
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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.
