- GBP/USD regains positive traction on Friday and reverses a major part of the overnight losses.
- The four-week-old trading range warrants caution before placing aggressive directional bets.
- Bearish oscillators on the daily chart support prospects for a break below the 200-day SMA.
The GBP/USD pair attracts some dip-buying on Friday and recovers a major part of the previous day's slide to the 1.1920-1.1915 support zone. The pair maintains its bid tone around the 1.2000 psychological mark through the early North American session and is supported by broad-based US Dollar weakness.
Looking at the broader picture, the two-way price moves witnessed over the past four weeks or so constitute the formation of a rectangle on the daily chart. The lower end of the trading band coincides with a technically significant 200-day Simple Moving Average (SMA) and should now act as a pivotal point.
A convincing break below will make the GBP/USD pair vulnerable to weaken further below the 1.1900 mark and test the YTD low, around the 1.1840 region touched in January. Some follow-through selling will complete a bearish double-top pattern formed near the 1.2445-1.2450 area and pave the way for deeper losses.
On the flip side, the overnight swing high, around the 1.2035 area, might act as an immediate hurdle ahead of the 1.2065-1.2070 supply zone. Any subsequent move-up could attract fresh sellers near the 1.2100 mark and remain capped near the 50-day SMA strong barrier, currently around the 1.2135-1.2140 area.
Some follow-through buying could lift the GBP/USD pair towards the 1.2200 mark en route to the February 14 peak, around the 1.2265-1.2270 region. A sustained strength beyond the latter will suggest that the slide from the 1.2445-1.2450 zone has run its course and shift the near-term bias back in favour of bullish traders.
GBP/USD daily chart
Key levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD remains on the back foot below 1.0800
EUR/USD remains on the defensive below 1.0800, as it consolidates weekly gains heading into Friday’s European session. The pair takes cues from the market’s sluggish momentum amid a light calendar and repositioning ahead of next week’s top-tier EU/ US events.
GBP/USD keeps range around 1.2550 amid quiet markets
GBP/USD is keeping its range play intact at around 1.2550 in the European morning this Friday. The US Dollar is licking its wounds following the US jobs data-led steep sell-off. Markets stay cautious, anticipating the end-of-the-week flows and position adjustments.
Gold could recapture 21 DMA resistance if RSI turns bullish
Gold price is consolidating Thursday’s impressive rebound from near $1,940, having yo-yoed within a $30 weekly range. Gold price could see a range breakout on Friday should the end-of-the-week flows trigger intense volatility.
Binance.US to suspend USD deposits, citing aggressive and intimidating tactics by the SEC
BinanceUS, the American arm of Binance.com, has indicated plans to suspend USD deposits, noting that its banking partners would do the same for withdrawal beginning June 13.
Eurozone in recession, but why?
It appears that a technical recession has indeed materialized, although the statistical offices took some time to officially declare it. The slight decline of 0.1% in both the fourth and first quarters is rather minimal.