GBP/USD

Sterling struggled yesterday as the Bank of England Governor Carney seemed to open the door to rate cuts. However, we see this as something of a miss-read by the market and could throw up the next opportunity. There is a strong support band $1.2900/$1.3010 and we still see weakness towards here on a medium term basis as a chance to buy. The 23.6% Fibonacci retracement (of $1.2193/$1.3515) at $1.3010 coinciding with the key October breakout as the first line of support. It was interesting to see Cable bounce off this level yesterday and the bulls are seemingly still happy to support weakness. There has been a mild negative shift on momentum, but given the slip back over the past week or so, this is still well contained within the positive medium term momentum configuration on RSI and MACD. On a near term basis, the bulls need to break the sequence of lower highs, so $1.3130 is initial resistance under $1.3170 and the more considerable $1.3200.

GBPUSD

 

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