GBP/USD outlook: Two-day recovery faces headwinds from falling 10DMA

Slobodan Drvenica Windsor Brokers

GBP/USD

Profit-taking on dollar longs at the end of Q3 lifts sterling for the second day, pushing the price to one-week high.

Slightly stronger UK economic growth in the second quarter, compared to Q1 and consensus, may boost optimism and add to supportive factors to sterling, though US consumer spending increased in line with expectations and underlying inflation (PCE report) rose marginally in August and suggests that price pressures are subsiding, which would be good news for the US central bank.

Fresh recovery so far retraced 50% of the latest 1.2424/1.2110 bear-leg and cracked pivotal falling 10DMA (1.2259), with close above here needed to strengthen near-term structure for further recovery in coming sessions.

Otherwise, expect the downside to remain vulnerable while the action stays below 10DMA.

Res: 1.2258; 1.2308; 1.2374; 1.2412.
Sup: 1.2188; 1.2110; 1.2074; 1.2000.

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

1. R3 1.2348
2. R2 1.2286
3. R1 1.2243
PP 1.2182
1. S1 1.2139
2. S2 1.2077
3. S3 1.2034

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.

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.

Gold drifts lower as positive risk tone tempers safe-haven demand; downside seems limited

Gold drifts lower during the Asian session on Tuesday and snaps a two-day winning streak, though it lacks strong follow-through selling and shows some resilience below the $5,000 psychological mark amid mixed cues. The outcome of Japan's snap election on Sunday removes political uncertainty, which, along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.