Cable has just halted a downswing around a potential technical support zone.
Will GBP/USD find enough demand at the level to extend a long-term trend?
We’re checkin’ out the daily chart!
GBP/USD 1-hour Forex Chart by TradingView
In case you missed our last FX Weekly Recap, you should know that the U.S. dollar got a lot of support from shifting Fed interest rate expectations and a potential Trump presidency leading to higher inflation in the U.S.
The British pound wasn’t a slacker either, as it maintained its gains against “riskier” FX counterparts after a BOE member hinted at higher terminal rates and a more gradual approach to easing policies.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the British pound, it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/USD, which bounced lower from the 1.3400 resistance, traded in a downtrend before reaching its current 1.2900 levels.
Will this week’s themes extend GBP/USD’s longer-term uptrend?
We’re taking a closer look at 1.2900, which is not far from the daily chart’s 100 SMA and a trend line support that’s been around since April.
Bullish candlesticks and sustained trading above 1.2950 set GBP/USD for a possible bounce from the 61.8% Fibonacci retracement of October’s downswing.
Alternatively, GBP/USD may extend its downswing and find more sustained bullish pressure around the 1.2800 psychological level, S2 Pivot Point support, and 200 SMA area instead.
But if GBP/USD starts poppin’ up more bearish candlesticks, or if the pair breaks below and consistently trades under the trend line support we’ve marked, then the pair may also head for previous inflection points like 1.2675 or 1.2550.
Whichever bias you end up trading, make sure you’re updated on the potential catalysts that may affect GBP/USD’s prices!
