Even Though this would be a quiet week for the British pound with no economic indicators for the investors to consider, the daily chart possesses some interesting facts on the daily chart which will be analyzed below. Last week the British inflation rate came in hotter than expected at 10.4% with the consensus at 9.9% while the Bank of England raised interest rates by 25 basis points reaching at 4.25%. These data could be translated into the narrative that the possibility of further interest rate hikes from BoE is still very high.
From the technical standpoint the price is trading in a sideways channel for the last three months with $1.24500 & $1.18000 being the upper and lower levels of the channel respectively. The price was touching the upper band of the Bollinger bands for a whole week before moving away in recent sessions. This is usually but not always considered to trigger a correction on the charts. Even Though this correction is not yet seen on the daily chart there are also other indications of this scenario.
The Stochastic oscillator is in the extreme overbought area while the Bollinger bands are expanding indicating volatility is still high in the market. If this is the case and we see a downward correction on the cable chart then the price might find support on the strong technical area of $1.21300. This area is made up of the 20,50 and 100 day moving averages and is also just above the daily Fibonacci retracement level of 23.6%. For this to play out the price needs to break below the psychological support of the round number at $1.22. In the other hand if we see a continuation to the upside we might see resistance building up around $1.24 which consists of the inside resistance area since early February 2023, the upper band of the Bollinger bands as well as the psychological resistance of the round number.
Disclaimer: the opinions in this article are personal to the writer and do not reflect those of Exness.
From the technical standpoint the price is trading in a sideways channel for the last three months with $1.24500 & $1.18000 being the upper and lower levels of the channel respectively. The price was touching the upper band of the Bollinger bands for a whole week before moving away in recent sessions. This is usually but not always considered to trigger a correction on the charts. Even Though this correction is not yet seen on the daily chart there are also other indications of this scenario.
The Stochastic oscillator is in the extreme overbought area while the Bollinger bands are expanding indicating volatility is still high in the market. If this is the case and we see a downward correction on the cable chart then the price might find support on the strong technical area of $1.21300. This area is made up of the 20,50 and 100 day moving averages and is also just above the daily Fibonacci retracement level of 23.6%. For this to play out the price needs to break below the psychological support of the round number at $1.22. In the other hand if we see a continuation to the upside we might see resistance building up around $1.24 which consists of the inside resistance area since early February 2023, the upper band of the Bollinger bands as well as the psychological resistance of the round number.
Disclaimer: the opinions in this article are personal to the writer and do not reflect those of Exness.