GBP/USD outlook: Top formation risks deeper pullback

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable extends lower in early Monday, following 0.75% drop on Friday, pressured by profit-taking after repeated failures at 1.3700 zone and comments from US Treasury nominee Yellen that US does not seek weaker dollar.
Fresh weakness broke below 20DMA (1.3560), softening near-term structure, with daily close below here to signal top and increase risk of testing pivotal supports at 1.3466/51 (Fibo 23.6% of 1.2675/1.3711 / Dec 11 trough).
Daily moving averages (5/10/20) turned to negative setup, but larger bulls remain in play and only break of 1.3466/51 pivots would sideline bulls and signal deeper pullback towards 1.3377 (rising 55DMA) and 1.3315 pivot (Fibo 38.2%) in extension.
Broken 10DMA (1.3596) caps today’s action and keeps fresh bears in play.

Res: 1.3557; 1.3596; 1.3618; 1.3670.
Sup: 1.3503; 1.3466; 1.3451; 1.3377.

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

1. R3 1.379
2. R2 1.3744
3. R1 1.3664
PP 1.3618
1. S1 1.3538
2. S2 1.3492
3. S3 1.3412

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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