GBP/USD Outlook: cable remains stuck at 1.2370 Fibo barrier, awaiting more news about Labour Party's referendum request


GBP/USD

Cable is trading within narrow range in European session on Wednesday and remains capped by Fibo barrier at 1.2370 (50% retracement of 1.2783/1.1958), where the action in past two days failed to register clear break higher.
The price managed to penetrate daily cloud after two unsuccessful attempts, but Tuesday’s action ended in long-legged Doji candle, signaling indecision, as bears might be running out of steam.
Sterling benefited from strong UK GDP data on Monday that reduced risk of BoE rate cut, but failed to gain stronger boost from Tuesday’s upbeat UK earnings data.
Fundamentals remain supportive as no-deal Brexit scenario has been sidelined and the latest request from opposition Labour party for new Brexit referendum, before any election.
The party supports divorce with agreement and since workable deal cannot be reached, they see new referendum as the best solution to avoid further escalation of political turmoil in Britain.
Technical studies on daily chart show mixed signals as MA’s (10/20/30/55) are in bullish configuration, but bullish momentum is fading and stochastic is in sideways mode, deeply in overbought territory.
Repeated rejection at 1.2370 Fibo barrier could increase risk of pullback, which would require verification on return below 55DMA (1.2316) and daily cloud base (1.2304).
Conversely, firm break above 1.2370 and lift above daily cloud top (1.2431) would generate fresh bullish signal for extension of recovery rally from 1.1958 spike low (3 Sep).

Res: 1.2370; 1.2384; 1.2431; 1.2468
Sup: 1.2331; 1.2316; 1.2306; 1.2273

gbpusd

 

Interested in GBPUSD technicals? Check out the key levels

    1. R3 1.2462
    2. R2 1.2421
    3. R1 1.2388
  1. PP 1.2347
    1. S1 1.2314
    2. S2 1.2273
    3. S3 1.224

 

The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.

Analysis feed

Latest Forex Analysis

Editors’ Picks

AUD/USD: Buyers and sellers jostle around 0.6600 as coronavirus keeps the driver’s seat

AUD/USD carries the New York session’s downbeat sentiment forward while taking rounds to 0.6600 at the start of the Asian session on Wednesday. While the coronavirus-led risk-off keeps the risk barometer under pressure, weakness in the US dollar restricted the pair’s losses.

AUD/USD News

USD/JPY consolidates losses but bears keep the baton amid coronavirus fears

USD/JPY consolidates losses to 110.20 amid the initial Asian session on Wednesday. That said, the pair portrayed the broad risk-off, led-by coronavirus fears, while declining for the third day in a row during the previous day.

USD/JPY News

Dollar domination set to continue, with or without coronavirus fears

The coronavirus-related fall in US bond yields has been weighing on the US dollar. Nevertheless – and despite worries coming from Markit's PMIs – the greenback is set to gain more ground.

Read more

Gold: Pares early losses, still in the red below $1650 level

Gold extended previous day's intraday retracement slide from multi-year tops and witnessed some follow-through long-unwinding trade on Tuesday.

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors

Cryptocurrencies

Signatures