GBP/USD outlook: Cable regains traction after Tuesday's strong fall but bears still in control
GBP/USD
Cable regained traction after a brief dip under 1.15 mark on lower than expected UK inflation data, as expectations of 0.75% BoE rate hike next week continue to dominate and underpin pound.
Wednesday’s sharp drop on higher than expected US inflation (cable was down 1.7% for the day in the biggest daily loss since May) left large daily bearish candle that weighs on near-term action, with signal being supported by strong bearish momentum on daily chart.
Recovery cracked initial barrier at 1.1542 (10DMA) with break here to ease bearish pressure and allow for stronger correction towards falling 20DMA (1.1656), which should cap rallies and maintain negative bias.
Only lift and close above pivotal Fibo barrier at 1.1738 (38.2% of 1.2276/1.1405) would sideline larger bears and open was for stronger rebound.
Res: 1.1562; 1.1610; 1.1656; 1.1738.
Sup: 1.1480; 1.1440; 1.1443; 1.1405.
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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.
