GBP/USD now shifted the focus to 1.3190 – UOB

Pablo Piovano FXStreet

FX Strategists at UOB Group noted that Cable could extend the move to 1.3190 in the next weeks.

Key Quotes

“The clear break above 1.3000 suggests the next up-leg has started and GBP/USD appears poised to crack the long-term declining trend line connecting the peaks of 1.7192 (Jul 2014) and 1.4377 (Apr 2018). The trend line at 1.3140 sits very close to the ‘inner boundary’ of trading envelope. In addition, at 1.3140, GBP/USD would have retraced about 50.0% of the decline from 1.4377 (Apr 2018) to 1.1959 (Sep 2019). In other words, 1.3140 is a strong and crucial long-term resistance level. If there is a break of 1.3140, the next resistance at 1.3190 is unlikely able to hold the advance in GBP/USD. Above 1.3190, there is hardly any resistance level of note until 1.3380 (followed by 1.3510).”

“Considering that the weekly RSI still has room to move higher before reaching overbought levels, the risk for the next few months is still for GBP/USD to strengthen further. However, depending on the manner of any advance, GBP/USD would likely reach overbought levels by the time it reaches the 1.3380/1.3510 resistance zone. In other words, the resistance zone may not be easy to break. In order to maintain the current impulsive momentum, GBP/USD should not move back below 1.2550. On a shorter-term note, 1.2770 is already a solid support level.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.