GBPUSD found a strong resistance at the 200-day simple moving average (SMA) currently at 1.3830, where the 50.0% Fibonacci retracement level of the down leg from 1.4248 to 1.3410 also happens to be. The price jumped slightly above the almost five-month-old descending channel but is retreating again in the very short term.
Technically, the RSI indicator is moving sideways in the positive region, suggesting a weakening positive bias. The stochastic oscillator is also sending discouraging signals as it is diving towards the 20 levels, confirming the recent downward move.
Failure to overcome the 200-day SMA could send the price down to the immediate support level of 1.3732, which is the 38.2% Fibonacci level, while not far below, the 40-day SMA may also be closely watched. Lower support could be next found near 1.3650, where the 20-day SMA is currently positioned, while a decisive close below this level could initially test the 23.6% Fibonacci of 1.3608 ahead of the 1.3410 number.
Alternatively, if 1.3830 proves easy to get through, the spotlight will turn to the 61.8% Fibonacci of 1.3930. On top of that, the bulls would need to clear the 1.4000 psychological level to push the rally towards the 35-month high of 1.4248.
In the medium-term picture, GBPUSD is maintaining a bearish outlook despite the insignificant violation of the downtrend channel. A drop below 1.3410 would endorse the negative outlook, though, a run above the 200-day SMA would shift the view back to neutral.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.