Slobodan Drvenica
Windsor Brokers
GBP/USD
Cable is consolidating under the pivotal Fibo barrier at 1.3580 (38.2% of 1.3833/1.3424) which capped Monday’s 0.63%advance.
Pound regained ground after a strong fall last week, sparked by BoE surprise decision to stay on hold, despite many were expecting the first rate hike after a pandemic.
Fresh strength was sparked by Monday’s hawkish comments from Governor Bailey who said BoE will act on interest rates if inflation risks grow further.
Monday’s rebound formed a reversal pattern on the daily chart, which still looks for confirmation on a firm break above 1.3580 pivots.
This would open the way for recovery extension towards 1.3621/28 (daily cloud base/50% retracement/10DMA) and unmask a lower top at 1.3692 (also converged 20/55DMA’s). Daily structure slightly improved on the latest rally, although studies are still in a bearish setup that requires caution.
Repeated daily close below 1.3580 would be an initial warning, however, return below 1.3520 (broken Fibo 23.6%) would confirm recovery stall and bring bears fully to play.
BoE policymakers are due to speak later today and markets will focus on their remarks for fresh signals.
Res: 1.3580; 1.3628; 1.3677; 1.3692.
Sup: 1.3547; 1.3520; 1.3500; 1.3450.
Interested in GBP/USD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.