GBP/USD outlook: GBP/USD eases from new multi-week high, deflated by economic data

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable pulled back from new two-month high, posted after Thursday’s nearly 1.9% advance (the biggest daily gain in one year, deflated by stronger than expected drop in UK inflation last month and better than expected US retail sales, which counter the fresh signals that the Fed may start cutting interest rates in early Q2 2024.

The price fell back into daily Ichimoku cloud (cloud top lays at 1.2439, reinforced by 200DMA) with daily close below here to weaken near-term structure and risk deeper pullback.

Fading bullish momentum on daily chart and stochastic hitting the borderline of overbought territory, add to initial negative signals, which still require confirmation.

Immediate support lays at 1.2395 (Fibo 23.6% of 1.2037/1.2505 rally) which guards lower pivots at 1.2345 (daily Tenkan-sen) and 1.2326 (Fibo 38.2%).

Caution on bounce and repeated close above the top of daily cloud, which would signal a limited correction and keep larger bulls intact.

Res: 1.2439; 1.2459; 1.2505; 1.2547

Sup: 1.2395; 1.2345; 1.2326; 1.2287

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

1. R3 1.2571
2. R2 1.2537
3. R1 1.2473
PP 1.2438
1. S1 1.2375
2. S2 1.234
3. S3 1.2277

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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