Morning outlook - GBP/USD tries to break 1.2944
- Fortunately for the Pound, the eight-hour downfall was stopped already near the 1.2880 level. Accordingly, the rest of the day the Sterling spent in a recovery against the US Dollar.
- By the moment, the pair has reached a combined resistance level set up by the weekly R1 at 1.2942 and the monthly S1 at 1.2944.
From a daily chart perspective, the further surge seems unlikely. On the other hand, an extensive fall is not expected as well, as the southern side is secured by the 55-, 100- and 200-hour SMAs together with the weekly R1 at 1.2858.
- It is quite possible that the rate will stuck at the above resistance for some time. In this sense, a decisive signal is expected to be given by release of information on the US CB Consumer Confidence at 14:00 GMT.
Yesterday the given pair moved quite similarly to the Euro and gold. The first half of the day it spent in a surge but, after reaching certain point, changed a direction and started to decline until the 55-hour SMA. Of course the main reason behind the plunge was a release of the satisfying US macroeconomic data.
Today, the Pound faces the same dilemma as the bullion. On the one hand, it might try once again to break through a combination of the weekly R1 and the monthly S1.
However, an easier path would be to continue the downfall towards the 100-hour SMA.
It seems that yesterday the pair made a rebound from an upper trend-line of a new medium-term ascending channel. If this is true, then the further plunge seems even rational.
But there is also a need to take into account an effect from another release of the US data today.