GBP/USD Outlook: consolidation to likely precede fresh weakness while falling 20DMA caps

Slobodan Drvenica Windsor Brokers

GBP/USD

Near-term action remains directionless narrow range mode after falling 20DMA repeatedly capped recovery attempts, but the downside remains protected by 10DMA for now. Prevailing tone remains negative as daily momentum starts turning south after unsuccessful attempt to break into positive territory, as uncertainty over Brexit continues to weigh on pound. Wednesday's comment of French President Macron that there will no renegotiations of the terms of divorce agreement, added to negative signals, with potential optimistic signs coming from German Chancellor Merkel, who asked Britain to come up with alternatives to the Irish border backstop within one month. With no releases from the UK scheduled today, the pair will be looking for signals from US PMI data and news, awaiting speech of Fed Chairman Powell on Friday. Firm break below 10DMA (1.2099) will be negative signal and will increase risk of fresh attack at key 1.20 support zone. Conversely, close above falling 20 DMA would ease downside pressure and open way for test of another pivotal barrier at 1.2208 (Fibo 38.2% of 1.2522/1.2015 bear-leg).

Res: 1.2155; 1.2179; 1.2208; 1.2253
Sup: 1.2099; 1.2064; 1.2044; 1.2015

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

1. R3 1.223
2. R2 1.2204
3. R1 1.2166
PP 1.2139
1. S1 1.2101
2. S2 1.2074
3. S3 1.2036

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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