GBP/USD outlook: Initial signals of reversal above thickening daily cloud developing on daily chart

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable edged higher in European trading on Friday ahead of release of US inflation data, today’s key economic event, with better than expected UK Q1 GDP numbers adding to improving sentiment.

Technical picture shows conflicting signals from daily indicators (14-d momentum remains in the negative territory / MA’s are in mixed setup and thickening daily Ichimoku cloud continues to underpin near term action.

Several downside attempts have been contained recently by 55DMA, just above rising cloud top, which develops initial signals of basing, with current extended sideways mode, pointing to consolidation before bulls regain traction.

The notion is supported by formation on weekly inverted hammer, though verification of initial bullish signal will require lift and close above pivotal barriers at 1.2670 (10DMA) and 1.2702 (Jun 25 lower top), to shift near-term focus higher and expose targets at 1.2736/65.

Caution of break through daily cloud (currently spanned between 1.2582 and 1.2561) which would revive bears and risk deeper fall.

Res: 1.2670; 1.2702; 1.2736; 1.2765.
Sup: 1.2626; 1.2582; 1.2561; 1.2513.

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

1. R3 1.2727
2. R2 1.2699
3. R1 1.2669
PP 1.2641
1. S1 1.2611
2. S2 1.2583
3. S3 1.2553

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 onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.