GBP/USD Pares Post U.K. Election Losses
- GBP/USD Pares Post U.K. Election Losses
- Technical Resistance Found Near 1.2856
- IG Client Sentiment is Neutral at -1.08; 52% Net-Short
The GBP/USD is paring its early losses to close Friday’s trading. This late day rally is coming after the pair declined as much as 168 pips on the results of this week’s U.K. general election. Early this morning the GBP/USD traded as low as 1.2635, and prices are now trading up over 100 pips from the low. Going into next week, traders will be looking to a slew of central bank data from both the BOE and the Fed to help drive the direction of the pair.
Going into next week, traders should note that the GBP/USD continues to trade in a long term uptrend. The pair remains technically above its 200 day MVA (simple moving average), which is found at 1.2521. In the short term however, the GBP/USD is trading below its 10 day EMA (exponential moving average) at 1.2856. This line is currently acting as a value of resistance, and traders should look for the GBP/USD to close above 1.2856 to signal a resumption of the pair’s primary trend. Alternatively, if the GBP/USD continues to trend lower next week, traders may begin to target the previously mentioned 200 day MVA.
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GBP/USD Daily Chart & Averages
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Despite today’s volatility and early decline, sentiment figures for the GBP/USD remain marginally negative. IG Client Sentiment now reads at -1.08, with 52% of traders short the currency pair. Traders should note that these totals are little changed from last week’s reading of -1.14. In the event that the GBP/USD rebounds and breaks back above its 10 day EMA, traders should look for sentiment totals to push back towards negative extremes in next week’s trading. Alternatively, if prices resume trading lower, traders should look for sentiment figures to flip positive. If this occurs it would be the first time the IG Client Sentiment has read net-long for the GBP/USD since April 12th.
--- Written by Walker, Analyst for DailyFX.com
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