Technical analysis: GBP/USD rallies from 1-year lows but downside risks remain

Anthony Charalambous, CFTe XM

GBPUSD is confronting the falling 50-day simple moving average (SMA) at 1.3429 after buyers powered up around the 1.3186 vicinity, opposing the six-month decline from the more than three-year high of 1.4248. The bearish SMAs are shielding the negative trend in the pair.

That said, the Ichimoku lines are indicating some waning in negative pressures but have yet to confirm that buyers have the upper hand. Looking at the short-term oscillators, they are showing no clear signs that upside drive is weak, suggesting that the bullish momentum is growing. The MACD has distanced itself from its red trigger line and has nudged above the zero mark, while the RSI is improving in the positive region. The stochastic lines are rising in overbought territory promoting positive price action in the pair.

If the pair oversteps the 50-day SMA at 1.3429, preliminary upside obstructions could stem from the Ichimoku cloud and the 1.3513 nearby high. Successfully thrusting higher, buyers may then struggle around the reinforced 1.3568-1.3606 border. Conquering this too may boost upside momentum, encouraging the bulls to tackle a critical zone of resistance between the 1.3700 handle and the 200-day SMA at 1.3743 before reaching for the 1.3803-1.3834 zone of highs from mid-October.

If the 50-day SMA curbs advances, initial footing for the pair could transpire within the 1.3333-1.3374 area. However, should the area fail to provide the necessary support to revive upside impetus, the price drop could snag around the Ichimoku lines at 1.3305 before sliding towards the 1.3186 key boundary, which recently muted negative powers. From here, if sellers manage to plot new lows and overcome the 1.3105-1.3134 support boundary, formed over the November-December 2020 period, the bears could then pursue the 1.3000 hurdle.

Summarizing, GBPUSD is striving to make headways, but the pair’s picture remains skewed to the downside as the price holds beneath the SMAs and the 1.3513 high.

Author

Anthony Charalambous, CFTe

Anthony Charalambous joined XM in 2019 and specializes in preparing daily technical analysis, using his years of trading experience to provide detailed forecasting for all major asset classes such as forex, indices, commodities and equities.

GBP/USD rebounds from multi-day lows; still below 1.3600

Following an initial drop to fresh six-day lows, GBP/USD now picks up some updside traction and trades in levels just shy of the 1.3600 barrier on Thursday. The generalised cautious tone among market participants continue to underpin the Greenback ahead of Friday’s data releases and the Fed Warsh’s speech.

EUR/USD trims loses, flirts with 1.1650

EUR/USD now manages to regain some composure, trimming earlier losses and reclaiming the mid-1.1600s on Thursday. The pair’s pullback comes on the back of marginal gains in the US Dollar, as market participants now shift their attention to Friday’s NFP revision and the speech by Chair Warsh at the Jackson Hole Symposium.

Gold returns to the sub-$4,600 zone, weekly lows

Gold adds to Wednesday’s pullback, reaching new weekly lows around $4,570 per troy ounce on Thursday. The precious metal remains on the back foot despite the widespread caution and the lack of clear direction of the US Dollar.

Crypto Today: Bitcoin, Ethereum, XRP bulls regain strength amid steady capital inflows

Cryptocurrency prices are broadly edging higher on Thursday, led by Bitcoin’s uptick near $80,000. Altcoins mirror Bitcoin’s short-term bullish outlook, with Ethereum trading above $2,500 and Ripple hovering above its key $1.40 support.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.