GBPUSD Outlook: Pound maintains positive tone but overbought techs warn on consolidative/corrective action

Slobodan Drvenica Windsor Brokers

GBPUSD

British pound is consolidating under new three-week high at 1.3174 in early Thursday's trading, with bulls show initial signs of fatigue.
Strong upside rejection on Wednesday, overbought slow stochastic and south-turning momentum warn of consolidative/corrective action, however, strong bullish sentiment on Brexit optimism, weaker dollar and overall bullish daily techs, keep near-term bias with bulls.
This suggests that consolidation might be limited before attack at immediate barrier at 1.3187 (falling 30WMA), break of which would open way towards key barriers at 1.3257 (12 Oct high) and 1.3297 (20 Sep peak).
On the other side, extended corrective dips should be contained by daily cloud top (1.3055) to keep near-term bulls intact.
Focus turns to Fed rate decision due later today, which could affect pound's bulls if US central bank keeps hawkish stance.
The Federal Reserve has raised interest rates three times this year and signaled another hike in December, as strong growth, tight labor market and inflation picking up, support scenario. Traders also focus a batch of data from the UK on Friday, with highlight on Q3 GDP, industrial production and trade balance, which could provide fresh signals

Res: 1.3144; 1.3174; 1.3187; 1.3235
Sup: 1.3125; 1.3098; 1.3055; 1.3036

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.3286
2. R2 1.3231
3. R1 1.3184
PP 1.3129
1. S1 1.3082
2. S2 1.3027
3. S3 1.298

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 onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.