GBP/USD Rebound Targets Major Resistance Ahead of BoE
- GBPUSD rebound to face BoE- Rally eyeing near-term resistance
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Technical Outlook: The decline off Friday’s high reversed sharply just pips ahead of support at the December 3rd low-day close. The subsequent rally has taken out the weekly opening range high and keeps our focus weighted to the topside targeting a more significant resistance confluence at ~1.5219/40. Subsequent resistance objectives are eyed at the 200DMA and the 1.618% extension at 1.5383.
Support rests with the lower median-line parallel (red) backed by our bullish invalidation level at 1.4950. A break below this mark shifts the focus towards a major Fibonacci confluence at 1.4847/58. As we approach the holidays and thus illiquid markets, it’s worth reviewing principles that help protect your capital. We call these principles the "Traits of Successful Traders.”
Notes: Sterling has been trading within the confines of a well-defined embedded ascending pitchfork formation with our immediate bias weighted to the topside while above 1.5114/18. Interim resistance stands at 1.5200/18 backed closely by the upper median-line parallels. A breach above these levels would suggest that a more meaningful reversal is underway in the pound with subsequent targets eyed at 1.5272& 1.5318.
A break below 1.5114 would invalidate our near-term outlook with such a scenario eyeing targets into the lower median line. The broader bullish invalidation level remains with the December low-day close at 1.4949. A quarter of the daily average true range (ATR) yields profit targets of 25-28pips per scalp. Added caution is warranted heading into the close of the week with the Bank of England (BoE) Interest Rate Decision on tap for tomorrow and US Retail Sales data on Friday likely to fuel volatility in their respective crosses.
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Relevant Data Releases Next Week
Other Setups in Play:
- GBP/NZD Rebound in Jeopardy as RBNZ/BOE Rate Decisions Loom
- Webinar: USD Setups in Focus as NFP Clears the Way for Fed Hike
- Dual Jobs Report to Threaten USD/CAD Consolidation Range
- USDJPY Testing Uptrend Resistance- Key NFP Levels
- AUDJPY Rally Approaching Initial Resistance Hurdle
---Written by Michael Boutros, Currency Strategist with DailyFX
As we approach the holidays and thus illiquid markets, it's worth reviewing principles that help protect your capital. We call these principles the "Traits of Successful Traders.”
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.