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GBPUSD Technical Outlook: Mildly Supportive Charts

GBPUSD Technical Outlook: Mildly Supportive Charts

2018-11-05 07:49:00
Nick Cawley, Strategist
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GBPUSD Technical Highlights, Prices and Analysis

  • GBPUSD four-hour chart shows possible near-term support.
  • Daily chart needs recent lower high pattern to be broken.

We have recently released our Q4 Trading Forecasts for a wide range of Currencies and Commodities, including GBPUSD with our fundamental and medium-term term technical outlook.

The four-hour GBPUSD chart paints a mixed picture with the pair failing to break the longer-dated moving averageand reversing from overbought territory (RSI indicator). An interesting area, and possible short-term support is seen around 1.2920 where the October 4 low meets a gap on the mid-day November 1 candle, caused by the preceding candles high and the November 1 16:00 GMT candle’s low. Below here, the 20- and 50-day moving averages converge around 1.2855.

GBPUSD Four Hour Price Chart November 2, 2018

GBPUSD Technical Outlook: Mildly Supportive Charts

GBPUSD is turning lower, and negative, at the end of week with the pair below all three moving averages. The recentuptick was halted by the 50-day ma two days in a row and needs to be broken and closed above to allow the pair to move higher to Fibonacci retracement at 1.3067. Above here there is room for GBPUSD to trade up to Fibonacci retracement at 1.3317, followed closely by the 200-day ma at 1.3326. This would break the pattern of lower highs and confirm further GBPUSD strength.Again the 1.2920 area comes into view as support ahead of 1.2786.

GBPUSD Daily Price Chart November 2, 2018

GBPUSD Technical Outlook: Mildly Supportive Charts

GBPUSD Retail Sentiment – Turning Bullish

IG Retail Sentiment data shows 64.9% of traders are net-long with the ratio of traders long to short at 1.85 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPUSD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse higher despite the fact traders remain net-long.

DailyFX has a vast amount of resources to help traders make more informed decisions. These include a fully updated Economic Calendar, and a raft of constantly updated Educational and Trading Guides

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

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

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