-
GBP/USD’s recent bounce off 1.2300 runs out of steam.
-
RSI and MACD hold beneath mid-levels.
GBP/USD started a bearish wave again after the spike towards the three-month high of 1.2860, sending prices beneath the 20- and the 50-day simple moving averages (SMAs). The market is ready to retest the mid-level of the long-term trading range at 1.2610.
Short-term momentum indicators are also pointing to a continuation of the bearish bias. The RSI is still developing beneath its downtrend line and the neutral threshold of 50, while the MACD is standing beneath its trigger and zero lines with weak momentum.
Further losses should see the immediate 1.2610 support ahead of the 200-day simple moving average (SMA) at 1.2570. A drop lower could take the bears until the 1.2465 region ahead of the lower boundary of the range at 1.2300.
In the event of an upside reversal, the 20-day SMA is the first resistance to focus on before hitting the 1.2740 resistance. A break above this level the pair could retest the upper boundary of the sideways channel at 1.2820.
To sum up, GBP/USD has been in a trading range since mid-November and in the very short term is looking bearish.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.