GBP/USD Rally Looks to Super Thursday for Fuel
- GBP/USD testing near-term resistance ahead of Super Thursday
- Updated targets & invalidation levels
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Technical Outlook:We’ve documented this turn in cable at length and heading into Super Thursday (BoE & Quarterly Inflation Report) the trade largely remains constructive while above confluence support at 1.2330. Interim support rests at 1.2546 & 1.2441/43 – both levels of interest for possible exhaustion / long entries. The pair is now testing key near-term resistance at 1.2671/80- a region defined by the 23.6% retracement of the Brexit decline, the November high & the 100% extension of the advance off the January low.
Bottom line: heading into the release I’d be looking to fade weakness (a move lower to buy) while above the 50-line with a breach higher targeting 1.2734 & more significant resistance into the 1.28-handle. Subsequent topside targets at the July low-day close & 161.8% extension at 1.2926/46.
- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are short GBPUSD- the ratio stands at -1.12 (47% of traders are long)- weak bullish reading
- Long positions are 7.8% lower than yesterday and 4.6% below levels seen last week
- Short positions are a full 26.5% higher than yesterday and 6.1% above levels seen last week
- Open interest is 7.6% higher than yesterday but 20.0% below its monthly average
- The current dynamic of increasing short positioning on building open interest continues to favor the long-side in the pound.
Relevant Data Releases
Looking for trade ideas? Review DailyFX’s 2017 1Q Projections
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---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.