GBP/USD outlook: Cable establishes above 1.36 pivot, additionally supported by upbeat UK Retail Sales

ANALYSIS | 02/18/2022 09:50:05 GMT

GBP/USD

Cable maintains firm tone and stays above broken 1.3600 barrier in early Friday, extending advance into fourth straight day and on track for the third consecutive bullish weekly close.

Pound remains underpinned by expectations of BoE rate hike, while better than expected UK retail sales data showed strong recovery from the knock of latest wave of Omicron variant in December, when many shops were closed and provided fresh boost to sterling.

Thursday’s eventual close above pivotal 1.3600 resistance (Fibo 61.8% of 1.3748/1.3357 descend, where rallies were repeatedly capped in past one month) generated strong bullish signal which will be confirmed on a weekly close above this level.

Technical studies on daily chart remain in full bullish setup and support the action, however, fading bullish momentum and north-heading stochastic approaching the border of overbought zone, warn that bulls may pause for consolidation before resuming.

Broken 1.3600 level reverted to solid support, with extended dips to find ground above daily Tenkan-sen (1.3565) and keep bulls in play.

Res: 1.3656; 1.3687; 1.3700; 1.3748.
Sup: 1.3600; 1.3565; 1.3524; 1.3507.

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

1. R3 1.3734
2. R2 1.3686
3. R1 1.3652
PP 1.3604
1. S1 1.3569
2. S2 1.3521
3. S3 1.3487

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