GBP/USD outlook: Risk aversion continues to pressure

Slobodan Drvenica Windsor Brokers

GBP/USD

GBPUSD fell to the lowest in three weeks in early Thursday, pressured by renewed risk aversion on growing concerns that interest rates would stay high for longer period.

Bear-leg off 1.2288 (Oct 24 lower top) extends into third straight day, with break of pivotal Fibo support at 1.2108 (76.4% retracement of 1.2037/1.2337 recovery), 1.2090 (Oct 19 trough) and 1.2074 (Fibo 38.2% of larger 1.0348/1.3141 uptrend expected to generate fresh bearish signal for attack at 1.2037/29 (Oct 4 low/weekly Ichimoku cloud top) and psychological 1.20 support in extension.

Daily studies maintain strong negative momentum and MA’s are in full bearish setup, contributing to negative near-term outlook, though bears may face headwinds as stochastic is entering oversold territory, (signal is already developing on hourly and 4-h charts).

Upticks should be capped at 1.2150/70 zone to keep bears intact and offer better selling opportunities.

Caution on extension and close above 1.2200 zone which would sideline immediate bears.

Res: 1.2111; 1.2158; 1.2176; 1.2208.
Sup: 1.2052; 1.2037; 1.2000; 1.1915.

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

1. R3 1.2226
2. R2 1.2201
3. R1 1.2157
PP 1.2132
1. S1 1.2087
2. S2 1.2062
3. S3 1.2017

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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