GBP/USD outlook: Cable holds firm bearish stance ahead of Powell's speech

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable remains in red for the fourth straight day and probes below psychological 1.20 support, hitting new one-month low.

Strong support at 1.1951 (200DMA / Fibo 23.6% of 1.0348/1.2447) is under pressure and break here to generate fresh bearish signal for extension towards pivotal support at 1.1841 (Jan 6 low), loss of which would confirm a double-top 1.2446 and risk deeper pullback.

Bearish momentum is rising on daily chart and in addition to multiple bear crosses of MA’s (10/20/30/55) maintains pressure, though oversold stochastic may produce headwinds to bears.

Stronger dollar on Fed’s hawkish shift in rate view also contributes to pound’s negative near-term stance.

Focus turns to Fed chair Powell who will be speaking today, with fresh pressure on sterling expected on more hawkish than expected remarks from Fed chief.

Broken 1.20 level reverted to immediate resistance, with upticks to be capped by daily cloud top (1.2099) and daily Kijun-sen (1.2144) to keep fresh bears in play.

Res: 1.2000; 1.2077; 1.2099; 1.2144.
Sup: 1.1951; 1.1900; 1.1841; 1.1796.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2137
2. R2 1.2107
3. R1 1.2065
PP 1.2035
1. S1 1.1993
2. S2 1.1964
3. S3 1.1922

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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