GBP/USD outlook: Cable rises above 1.2900 on solid economic data
GBP/USD
Cable rose to the highest since July 25 on Friday, benefiting from improved risk sentiment after upbeat US data on Thursday (jobless claims / retail sales) and solid UK retail sales added to fading recession fears.
Sterling also appreciated the still hawkish stance of BoE, as expectations for another rate cut (after the central bank reduced borrowing cost by 25 basis points on Aug 1 meeting) remain below 50%.
Fresh bulls cracked round-figure 1.2900 barrier (also Fibo 61.8% of 1.3044/1.2664 bear-leg), as Friday’s acceleration higher signaled continuation of recovery leg from 1.2664 (Aug 8 low) after bulls paused for two-day consolidation.
Bullish daily studies support the action, though overbought conditions may produce headwinds.
Near-term action should stay above 1.2854 (broken 50% retracement / daily Kijun-sen) to keep bulls in play.
Close above 1.2900 handle to strengthen near-term structure for attack at 1.2954 (Fibo 76.4%) and 1.3000 (psychological) in extension.
Res: 1.2914; 1.2954; 1.3000; 1.3044.
Sup: 1.2873; 1.2854; 1.2820; 1.2790.
Interested in GBP/USD technicals? Check out the key levels
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.
