GBP/USD Talking Points
- GBP/USD slides from main resistance as bullish momentum subsides.
- Pound Dollar faces technical headwinds in anticipation of subsequent week’s event risk.
- FOMC and BoE (Bank of England) brace for additional fee hikes with any surprises including as a possible catalyst for value motion.
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GBP/USD Technical Analysis
The British Pound is beginning to present indicators of weak point in opposition to its Dollar counterpart as upside momentum subsides. With bulls driving GBP/USD right into a wall of resistance round 1.230, the midpoint of the 2021 – 2022 stays key for the approaching transfer.
After reaching a excessive of 1.2345 earlier this week, failure to carry above this stage allowed bears to step in, driving prices decrease. As value motion falls right into a narrow range of technical significance, the 200-day MA (moving average) is offering assist at 1.212.
Chart ready by Tammy Da Costa utilizing TradingView
With the major currency pair at the moment buying and selling round the important thing psychological stage of 1.220, a break of present support or resistance may drive the short-term transfer.
While the weekly chart illustrates how the 1.23 deal with has supplied support and resistance for historic strikes, the 50-week MA (moving average) rests simply above round 1.240.
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GBP/USD Weekly Chart
Chart ready by Tammy Da Costa utilizing TradingView
For bulls to proceed to drive a broader restoration, a break of 1.23 and 1.24 may see costs rising again to the following key psychological level of 1.250.
However, if costs fall beneath 1.220, extra promoting stress and a transfer beneath 1.212 may gasoline draw back momentum again in direction of 1.200.
GBP/USD Client Sentiment
IG client sentiment supplies real-time information on retail dealer positioning which may spotlight potential extremes in crowd habits. At the time of writing, retail dealer information reveals 44.57% of merchants are net-long with the ratio of merchants brief to lengthy at 1.24 to 1.
We sometimes take a contrarian view to crowd sentiment, however the truth merchants are much less net-short from final week suggests GBP/USD provides us an additional blended buying and selling bias.
| Change in | Longs | Shorts | OI |
| Daily | 3% | 2% | 3% |
| Weekly | 25% | -14% | 0% |
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and observe Tammy on Twitter: @Tams707
