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GBP/USD Rally Looks to Super Thursday for Fuel

GBP/USD Rally Looks to Super Thursday for Fuel

Talking Points

GBP/USD 240min

GBP/USD 240min Chart

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

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex contact him at or Click Here to be added to his email distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.