GBP/USD outlook: Rally takes a breather under key Fibo resistance at 1.2425

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable maintain bullish tone on Monday and hit three-week at 1.2425 in European trading but pulled back to 1.2380 zone after rally was capped by Fibo barrier at 1.2425 (61.8% of 1.2642/1.2074).
Weak dollar and UK's manufacturing PMI in line with expectations (40.7) and well above previous month's 32.6 figure, adds to positive tone. Bullish setup of daily 10;20;30;55 DMA's and rising positive momentum, underpin the action, but rally may pause for consolidation before resuming. Broken daily Kijun-sen / 50% of 1.2642/1.2074 (1.2358) should ideally contain but dips towards daily cloud top (1.2304) cannot be ruled out. Reversal above cloud top would keep bulls in play for renewed attack at 1.2425 pivot, break of which would open way for 1.25+ gains. Caution on return and close below cloud top that would signal recovery stall.

Res: 1.2425; 1.2467; 1.2484; 1.2508
Sup: 1.2358; 1.2304; 1.2291; 1.2243

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

1. R3 1.2497
2. R2 1.2446
3. R1 1.2394
PP 1.2342
1. S1 1.229
2. S2 1.2239
3. S3 1.2187

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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