GBP/USD outlook: Cable cracks pivotal 1.2300 resistance zone on strong UK labor data

Slobodan Drvenica Windsor Brokers

GBP/USD

GBPUSD cracked 1.2300 barrier in early European trading on Monday, boosted by better than expected US labor data (Sep wages rose above expectations and employment was significantly up in three months to Sep) which added to hawkish stance on BoE rate outlook.

Cable rises for the third straight day after a bear trap on Friday, with penetration and close within thick daily cloud, contributing to fresh bullish signals, though bulls face headwinds at pivotal 1.2300 resistance zone (round-figure / Fibo 38.2% of 1.2737/1.2037 bear-leg / Nov 11 high).

Clear break here is needed to further strengthen near-term structure and keep in focus key barriers at 1.2428/36 (Nov 6 recovery top / 200DMA).

Strong bullish momentum on daily chart supports the action which needs to hold above broken daily cloud base, reinforced by daily Kijun-sen (1.2249) to keep bullish bias.

Caution on break below daily cloud which would weaken near-term structure and risk test of lower pivot at 1.2186 (last Friday’s spike low).

Markets await release of US Oct inflation report for fresh signals.

Res: 1.2308; 1.2337; 1.2387; 1.2428.
Sup: 1.2249; 1.2202; 1.2186; 1.2095.

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

1. R3 1.2367
2. R2 1.2324
3. R1 1.23
PP 1.2257
1. S1 1.2233
2. S2 1.219
3. S3 1.2166

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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