fxs_header_sponsor_anchor

News

GBP/USD: Focus on stocks

  • Risk aversion could hurt GBP and vice versa.
  • Charts favor further upside in Sterling.

GBP/USD jumped to 1.4218 last week - the highest level since Feb. 2 on the back of a brexit transitional agreement and strong UK data.

However, cable's jets were cooled by fears of US-China trade war and the resulting risk aversion in the stock markets. The spot ticked higher in Asia and was last seen trading at 1.4164 as the S&P 500 futures jumped 0.5 percent on reports the US and China are working to avert a full-blown trade war.

Focus on stocks

The relief rally in the stocks will likely gather pace if both nations soften their stance on trade. In such a scenario, the GBP/USD pair could revisit and may possibly break above the last week's high of 1.4218. Meanwhile, risk aversion could yield a pullback to 10-day moving average located at 1.4035. It is worth noting that British Pound still ranks last on the list of the anti-risk currencies, courtesy of UK's current account deficit.

Technical bias remains bullish

A sequence of higher highs and lower highs, upward sloping (biased bullish) 5-day MA, 10-day MA and the bullish RSI (above 50.00 and trending) indicates scope for a rally to 1.4278 (Feb. 2 high). A close higher would allow a sustained rally to 1.4345 (recent high). On the downside, breach of support at 1.4107 (5-day MA) could yield a pullback to 1.4036 (10-day MA) and 1.40 (psychological support).

 

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.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.