Will GBP/USD bulls be able to defend the weekly 50-MA support of 1.2660?

Omkar Godbole FXStreet Contributor

GBP/USD printed a weekly low of 1.2589 on Wednesday before BoE Chief Economist Andy Haldane’s hawkish comments pushed the pair higher to 1.2710.

UK Prime Minister Theresa May’s visit to Brussels failed to move the pair in a big way on Thursday. The spot traded around 1.27 levels in the Asian session today. The weekly 50-MA offers support at 1.2660.

Bearish exhaustion below weekly 50-MA

For three weeks now (including this week), the sellers have failed to keep the pair below weekly 50-MA. On the weekly chart, we clearly candles with long tails below the weekly 50-MA, suggesting dip demand/bearish exhaustion.

Risk-on may weigh over GBP/USD

Oil recovery may lead to risk-reset in the markets and yield a steeper treasury yield curve and a strong US dollar. Thus, the GBP / USD pair may end the week below the 50-week MA if the oil recovery gathers steam.

On the other hand, a fresh sell-off in oil would yield a flatter yield curve and keep the dollar bulls at the bay, thus helping the GBP bulls defend the weekly 50-MA support.

Fed speak

St. Louis Fed President James Bullard, Cleveland Fed President Loretta Mester, and Fed governor Jerome Powell are likely to offer more insights into the future rate hike plans. The Cable may close below the weekly 50-MA if the policymakers defend Fed’s decision to maintain the outlook for three rate hikes this year despite weak inflation. The US preliminary manufacturing PMI is unlikely to move the USD pairs in a big way.

GBP/USD Technical Levels

Immediate support is seen at 1.2675 (Asian session low), which, if breached, would open doors for 1.2633 (100-DMA) and 1.2589 (June 21 low). On the higher side, breach of resistance at 1.27 (zero levels) would open up upside towards 1.2755 (Apr 21 low) and 1.2769 (May 31 low).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Overbought	High
1H	Bearish	Overbought	Expanding
4H	Bullish	Neutral	Low
1D	Bearish	Neutral	Expanding
1W	Bullish	Neutral	Expanding
Updated Jun 23, 03:30 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD challenges 1.1800, two-week lows

EUR/USD remains on the defensive, extending its leg lower to the vicinity of the 1.1800 region, or two-week lows, on Tuesday. The move lower comes as the US Dollar gathers further traction ahead of key US data releases, inclusing the FOMC Minutes, on Wednesday.

GBP/USD looks weaker near 1.3500

GBP/USD adds to Monday’s pessimism and puts the 1.3500 support to the test on Tuesday. Cable’s marked pullback comes in response to extra gains in the Greenback while disappointing UK jobs data also collaborate with the offered bias around the British Pound.

Gold recovers modestly, stays deep in red below $4,950

Gold (XAU/USD) stages a rebound but remains deep in negative territory below $4,950 after touching its weakest level in over a week near $4,850 earlier in the day. Renewed US Dollar strength makes it difficult for XAU/USD to gather recovery momentum despite the risk-averse market atmosphere.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.