Downside risks have pressured the GBP/USD exchange rate lower for two consecutive weeks. Following a breakout from the senior channel on Thursday, the Pound fell even lower and eventually reached a fresh one-year low - the monthly S2 at 1.2750 mid-Friday. Since then, the pair has been trading with volatility above this monthly support.
Given that the Pound remains strongly oversold, it seems that bears have exhausted their strength, thus giving opportunity for bulls to take over the market soon. Strong upside pressure will be necessary to dash through the combined resistance of the 55– and 100-hour SMAs and the weekly PP at 1.2840.
It is more likely that the Sterling tries to push higher today; however, if a fall nevertheless occurs, the 1.26 mark should not be surpassed.
Given that the Pound remains strongly oversold, it seems that bears have exhausted their strength, thus giving opportunity for bulls to take over the market soon. Strong upside pressure will be necessary to dash through the combined resistance of the 55– and 100-hour SMAs and the weekly PP at 1.2840.
It is more likely that the Sterling tries to push higher today; however, if a fall nevertheless occurs, the 1.26 mark should not be surpassed.
Comment:
The Sterling has remained relatively unchanged against the US Dollar since the beginning of this week. It seems that the pair tried to edge higher during this time, but it was stopped by the 55– and 100-hour SMAs.
At the time of this analysis, the Pound was fluctuating around the 1.27 level slightly below these moving averages. Technical indicators remain bullish; thus, a breakout could finally happen today. The following upward target after this breakout is the breached senior channel and the 200-hour and 200-period (4H) SMAs circa 1.2850.
It is unlikely that the pair extends its losses below the weekly S1 at 1.2660 in this session. Thus, even if the aforementioned breakout to the upside does not occur, the pair is expected to continue consolidating with a slight tendency southwards.
The Sterling has remained relatively unchanged against the US Dollar since the beginning of this week. It seems that the pair tried to edge higher during this time, but it was stopped by the 55– and 100-hour SMAs.
At the time of this analysis, the Pound was fluctuating around the 1.27 level slightly below these moving averages. Technical indicators remain bullish; thus, a breakout could finally happen today. The following upward target after this breakout is the breached senior channel and the 200-hour and 200-period (4H) SMAs circa 1.2850.
It is unlikely that the pair extends its losses below the weekly S1 at 1.2660 in this session. Thus, even if the aforementioned breakout to the upside does not occur, the pair is expected to continue consolidating with a slight tendency southwards.
Comment:
The GBP/USD currency exchange rate on Friday broke the resistance of the dominant medium scale pattern. The event resulted in an increase of volatility, as the rate bounced around without a clear direction.
On Monday morning the volatility was gone. The rate was trading almost flat in a limbo around the new weekly PP at 1.2748 level. The pivot point was holding the currency exchange rate down, as it attempted to surge.
The rate might surge higher as soon as additional support arrives. Namely, the 55 and 100– hour simple moving averages were approaching from the downside.
The GBP/USD currency exchange rate on Friday broke the resistance of the dominant medium scale pattern. The event resulted in an increase of volatility, as the rate bounced around without a clear direction.
On Monday morning the volatility was gone. The rate was trading almost flat in a limbo around the new weekly PP at 1.2748 level. The pivot point was holding the currency exchange rate down, as it attempted to surge.
The rate might surge higher as soon as additional support arrives. Namely, the 55 and 100– hour simple moving averages were approaching from the downside.
The Pound started to consolidate against the US Dollar on Friday. This restricted the pair in the 1.2740/1.2800 range for four trading sessions.
Following a test of the 100-hour SMA on Tuesday, bears nevertheless managed to push the pair below its four-day support down to 1.27. This mark has worked successfully as support/resistance since November, 2016. This fact should increase upside risks, thus resulting in appreciation away from GBP/USD’s one-year low.
The nearest resistance is the monthly S2 and the 55– and 100-hour SMAs circa 1.2770. Solid data releases could push the pair above this level and towards the breached channel line and the weekly PP at 1.2840.
Conversely, a strong fall should is unlikely to occur in this session with the daily low being located near 1.2660.