GBP/USD Outlook: Extended bears pressure major supports

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable probed below 1.22 handle in European trading on Thursday, extending weakness below daily cloud and pressuring key barriers at 1.2174/64 (Fibo 38.2% of 1.1409/1.2647/7 Apr low). Stronger dollar after Fed's Powell dismissed negative rates weigh on pound, already pressured by record GDP contraction and signals that BoE would increase QE next month. Daily techs in full bearish setup add to negative outlook. Firm break below 1.2174/64 pivots would generate reversal signal as it will signal an end of range trading since early April and also confirm double-top (1.2647/42) where 200DMA repeatedly capped recovery. Break lower would open way towards targets at 1.2028 (50% of 1.1409/1.2647) and 1.20 (psychological). Former low (1.2247) and falling 5DMA (1.2287) mark solid barriers which are expected to cap upticks and keep bears intact.

Res: 1.2247; 1.2287; 1.2309; 1.2339
Sup: 1.2174; 1.2164; 1.2131; 1.2100

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

1. R3 1.244
2. R2 1.239
3. R1 1.2311
PP 1.2261
1. S1 1.2181
2. S2 1.2131
3. S3 1.2052

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.

EUR/USD fades below 1.1900 amid sudden USD demand

EUR/USD has quickly reversed modest intraday gains on Thursday, struggling to retain the 1.1850. The Greenback benefits from both, risk aversion, and market rumours suggesting Russia is analyising returning to the US Dollar system.

GBP/USD change course, nears 1.3600

GBP/USD trimmed most of its intraday gains and approaches the 1.3600 threshold. Tepid United Kingdom data released earlier in the day adds to Sterling Pound retracement, as the flash estimate of the Q4 Gross Domestic Product posted a modest 0.1% advance in the three months to December.