- GBP/USD remains depressed within fortnight-old bearish channel, stays below the key EMA confluence.
- Steady RSI, bullish MACD signals allow Cable bears to take a breather.
- 78.6% Fibonacci retracement, previous monthly low lures Pound Sterling bears.
GBP/USD fades the previous day’s rebound from a two-month low as it retreats to 1.2345 during early Monday morning in Asia. In doing so, the Cable pair remains within a two-week-old descending trend channel.
It’s worth noting that the latest initial agreement on the US debt ceiling extension may allow the US Dollar to pare some of its latest gains should the policymakers assent to the deal in the Congress voting. However, the holidays in the US and the UK on Monday and recent dissatisfaction among the Democrats and, as well as among the Republicans, from the deal may prod the Cable pair buyers.
Also read: US President Biden: This deal is good news for the American people
That said, the near 50.0 levels of the RSI (14) and bullish MACD signals prod the GBP/USD bears and can allow them to target the 61.8% Fibonacci retracement of the upside from late March to early May, close to 1.2380 by the press time.
Following that, the aforementioned channel’s top line, around the 1.2400 round figure, will be in the spotlight as a break of which will defy the bearish chart formation and can lure the Pound Sterling buyers.
However, a convergence of the 200-bar Exponential Moving Average (EMA) and the 100-EMA, around 1.2440-45, appears a tough nut to crack for the GBP/USD buyers, a break of which will allow the bulls to retake control.
On the contrary, the latest swing low of around 1.2300 and the 78.6% Fibonacci retracement level of near 1.2295 can restrict the immediate downside of the Cable pair. Also acting as short-term key support is the stated channel’s lower line surrounding 1.2285.
Overall, GBP/USD may witness a corrective bounce but the trend remains bearish until the quote surpasses the 1.2440-45 hurdle.
GBP/USD: Four-hour chart
Trend: Further downside expected
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD struggles near multi-month low; remains below 0.6500 after Aussie jobs report
AUD/USD hangs near its lowest level since August 6 and remains below the 0.6500 psychological mark following the release of rather unimpressive Australian employment details. RBA Governor Michele Bullock said this Thursday that interest rates were restrictive enough and will not rise any further.
USD/JPY stands firm near multi-month top, above mid-155.00s
USD/JPY holds steady near its highest level since July 24, above mid-155.00s during the Asian session on Thursday and seems poised to prolong its appreciating move. The continuation of the Trump trade lifts the USD to a fresh YTD high.
Gold price remains vulnerable near its lowest level since September 19
Gold price enters a bearish consolidation following a four-day decline to a nearly two-month low amid oversold conditions on hourly charts. Any meaningful recovery, however, seems elusive amid the recent USD bullish run to a fresh YTD low, bolstered by expectations for US President-elect Donald Trump's expansionary policies and elevated US bond yields.
Dogecoin Price Forecast: Miners offload $240M as DOGE approaches risk zone
Since Donald Trump’s victory on November 5, Dogecoin has emerged as the best performing asset among the top 10 ranked cryptocurrencies. On November 12, DOGE reached a new milestone price propelled by Trump’s statement confirming Elon Musk’s involvement in the incoming administration.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
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.