GBP/USD Outlook: Pound benefits from weaker dollar but break above 1.2700 zone is needed to confirm

Slobodan Drvenica Windsor Brokers

GBPUSD

Sterling enters US session at the front foot after hitting one-week high at 1.2705 earlier, with initial positive signals being generated on break above 10SMA (1.2643) and last Thursday's recovery high at 1.2686.
Weaker dollar on expectations of Fed's dovish hike tomorrow keeps pound underpinned, but bulls need to sustain break above 1.2700 (Fibo 61.8% of 1.2839/1.2476) and 20SMA (1.2714) to confirm full retracement of post-parliamentary Brexit vote cancellation fall and signal further recovery.
Close above 10SMA would generate initial positive signal, but weakening momentum on daily chart could upset bulls.
Conversely, failure to close above 10SMA would weaken near-term tone and keep the downside vulnerable.

Res: 1.2700; 1.2713; 1.2782; 1.2810
Sup: 1.2643; 1.2609; 1.2564; 1.2528

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.2721
2. R2 1.2684
3. R1 1.2648
PP 1.2611
1. S1 1.2574
2. S2 1.2537
3. S3 1.25

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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