GBP/USD outlook: Cable falls to new multi-month low after disappointing UK economic data
|GBP/USD
GBPUSD dipped below 1.2500 handle and hit new lowest in 6 ½ months on Friday, after disappointing UK October retail sales and November PMI numbers further weakened sterling, adding to worsened geopolitical picture on threats of stronger escalation of war in Ukraine.
Strengthening dollar on euphoria of Trump trades, as well as increased safe-haven demand on deteriorating geopolitics contributes to negative near-term outlook to the British currency.
Cable is on track for the eighth consecutive weekly loss and also to end the second straight month in red, adding to developing reversal signals on larger timeframes (week / month).
Technical picture remains firmly bearish on daily chart, with strengthening negative momentum (14-d momentum continues to head south, deeply in negative territory) and MA’s in full bearish configuration (formation of 5/200; 10/200 and 20/200DMA’s death crosses).
However, RSI entered oversold territory and may contribute to week-end profit-taking that would provide stronger headwinds to bears and push the price higher.
Initial resistances lay at 1.2600 zone (today’s high / former lows of short consolidation / 100WMA), with upticks to be ideally capped under 1.2700 barrier (falling 10DMA / psychological) and guard upper breakpoint at 1.2818 (200DMA).
Res: 1.2600; 1.2624; 1.2680; 1.2700.
Sup: 1.2487; 1.2445; 1.2400; 1.2299.
Interested in GBP/USD technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.