GBP/USD, BRITISH POUND – Technical Outlook:
- GBP/USD’s spectacular two-month rally could possibly be due for a breather.
- To ensure, there are not any indicators of reversal simply but.
- What are the signposts to look at?
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GBP/USD SHORT-TERM TECHNICAL FORECAST – NEUTRAL
GBP/USD’s spectacular two-month rally could possibly be due for a breather.
GBP/USD is testing a stiff hurdle on the 200-day shifting common for the primary time since January, not too removed from one other important ceiling on the August excessive of 1.2300. It was final decisively above the long-term shifting common in 2021. Hence a break above the converged barrier could have implications for the medium-term outlook. In current weeks, the percentages that GBP/USD’s downtrend has ‘capitulated’ have grown – first highlighted in October with a follow up last weekfinish.
GBP/USD Daily Chart
Chart Created Using TradingView
For the second, the probabilities are that cable might quickly run its course for now. Granted there are not any indicators of reversal on intraday and better timeframe charts. However, on intraday charts, there are indications of fatigue – unfavourable divergence on 180-minutes and 240-minute charts (rising worth related to falling/stalling of momentum).
On its personal, the formation of a unfavourable divergence just isn’t sufficient to make sure a turnaround until accompanied by a worth reversal. In this regard, up to now GBP/USD continues to make increased highs every day, implying that the trail of least resistance stays up.
GBP/USD 180-minutes Chart
Chart Created Using TradingView
At the very least, the pair must first cease making new highs. Once it stops making new highs, the main target would shift to fast help on the November 18 excessive of 1.1950. A decisive break beneath 1.1950 could be the primary signal that cracks within the rally are rising, opening the door towards the November 17 low of 1.1760. A piercing of 1.1760 would affirm that the short-term upward strain had pale.
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— Written by Manish Jaradi, Strategist for DailyFX.com
