GBPUSD Outlook - Heavy tone after bulls were capped by falling 10SMA

Slobodan Drvenica Windsor Brokers

Cable holds at the back foot in early hours of the US trading after attempts to extend strong rally of last Friday were capped by falling 10SMA (1.3158) also 50% retracement of 1.3362/1.2957 bear-leg.
Bids at 1.31 zone (round-figure, reinforced by 5SMA) so far hold, but downside at risk.
Strong words from UK PM May today, regarding Brexit talks, produced mild reaction as markets look for more evidence.
Weakening momentum maintains pressure after a cluster of MA’s (10;20;30) stayed intact and continues to weigh, with larger picture showing strong pressure from falling thick daily cloud.
Look for fresh negative signal on close below 1.3100 zone, which would open way fro test of former key support at 1.3049 and psychological 1.30 support.
Bullish scenario needs close above 10SMA as minimum requirement to sideline downside threats and signal further recovery towards next pivot at 1.3207 (falling 20SMA / Fibo 61.8% of 1.3362/1.2957 bear-leg).

Res: 1.3158; 1.3176; 1.3207; 1.3267
Sup: 1.3112; 1.3087; 1.3049; 1.3000

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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