GBP/USD fails to recover 1.4200, holds onto important daily gains

Cable rebounds further, finds resistance at the 1.4200 area.
Pound also faces resistance against the euro and losses momentum.

Matías Salord FXStreet

The GBP/USD rose further during the American session and peaked at 1.4200. Like Thursday, it was unable to break the 1.4200 area and pulled back. The retracement found support at 1.4165 and the pair is about to end the week flat hovering around 1.4160/70.

The pound recovered sharply after falling before the NFP to 1.4082, the lowest level in almost three weeks. From the lows it bounced to the upside, boosted by the decline of the US dollar after the US employment report that came in below expectations.

Also the pound lost some momentum after the EUR/GBP moved off lows, rising again back above a key support level. A close clearly below 0.8560/70 could trigger more losses in the cross, adding strength to the pound.

GBP/USD Technical outlook

The pound is about to end the week practically unchanged against the US dollar after being unable to hold above 1.4200 while at the same time rebounding sharply from below 1.4100. Yohay Elam, Analyst at FXStreet, points out the daily chart in GBP/USD still points to an uptrend, “at least as long as cable holds above the 1.4010 line that is a clear separator of ranges. In the meantime, momentum remains to the upside and the currency pair is trading well above the 50 day, 100-day and 200-day simple moving averages, a bullish sign.”

On the downside, Elam points out that soft support awaits at 1.4050, “ahead of critical support at 1.4010 mentioned earlier. Further down, 1.3980, 1.3930 and 1.3850 come into play.”

Technical levels

GBP/USD

Overview
Today last price	1.4173
Today Daily Change	0.0066
Today Daily Change %	0.47
Today daily open	1.4107

Trends
Daily SMA20	1.4135
Daily SMA50	1.3958
Daily SMA100	1.3894
Daily SMA200	1.3548

Levels
Previous Daily High	1.4203
Previous Daily Low	1.4087
Previous Weekly High	1.4219
Previous Weekly Low	1.4092
Previous Monthly High	1.4234
Previous Monthly Low	1.3801
Daily Fibonacci 38.2%	1.4131
Daily Fibonacci 61.8%	1.4159
Daily Pivot Point S1	1.4061
Daily Pivot Point S2	1.4016
Daily Pivot Point S3	1.3945
Daily Pivot Point R1	1.4178
Daily Pivot Point R2	1.4248
Daily Pivot Point R3	1.4294

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD flatlines near 0.6965 as less hawkish RBA counters USD weakness

AUD/USD holds steady above a two-week low, trading near 0.6965 in the Asian session on Wednesday as early midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, reviving safe-haven demand triggers a fresh leg down in US bond yields, offsetting Fed hike bets and exerting additional pressure on the buck. However, a less hawkish RBA caps the Aussie.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold continues scaling new weekly highs; eyes $4,050 as US sticks to elections-led losses

Gold builds on its strong intraday move up, hitting a series of new weekly tops, and climbing back close to the $4,050 level during the first half of the European session amid a broadly weaker US Dollar. Democrats’ wins in the House and Senate raise the prospect of gridlock in Washington. Moreover, heightened political uncertainty drove investors to safe-haven assets, exerting some downward pressure on US bond yields. This is seen weighing on the Greenback and supporting the precious metal.

Bitcoin tests critical support, Ethereum struggles below resistance, XRP extends losses

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) remain under pressure on Wednesday as bearish momentum continues to weigh on prices. BTC approaches key support around $76,466, and a decisive close below could open the door to deeper losses. Meanwhile, ETH struggles below key resistance while XRP faces rejection at the upper trendline of a falling channel pattern, all hinting at deeper losses.

ADP Employment Report expected to show slower job growth in October

The Automatic Data Processing Research Institute is due to release October’s private-sector employment report on Wednesday. The market consensus anticipates a moderate slowdown in job creation, with the ADP Employment Change expected to show 69K new private jobs in October, down from 90K in September.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.