GBP/USD outlook: Recovery shows signs of stall
GBP/USD
Strong recovery rally in past three days seems to be running out of steam on Friday, as the daily action was shaped in red candle with long upper shadow.
In addition, falling 20DMA repeatedly capped upside attempts, stochastic is overbought and 14-d momentum remains deeply in the negative territory, all contributing to initial signals of recovery stall.
On the other hand, positive signals are developing on weekly chart, as bullish engulfing pattern is forming, with 14-w momentum heading north and approaching the centreline and stochastic about to emerge from oversold zone.
Mixed studies keep the near-term outlook unclear, with the pair looking for clearer direction signals.
Friday’s close below 20DMA to generate initial negative signal, which will require validation on dip and close below 10DMA (1.2440).
Conversely, sustained break above pivotal 1.2500 zone would improve near-term outlook, but extension and close above 1.2552/57 (Fibo 61.8% of 1.2709/1.2299 / 200DMA) will be required to bring bulls in play.
Res: 1.2516; 1.2552; 1.2557; 1.2578.
Sup: 1.2456; 1.2400; 1.2396; 1.2331.
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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.
