GBPUSD Weekly Technical Outlook: Continuing to Press Higher
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Technical Forecast for GBP/USD: Bullish
GBPUSD Technical Highlights, Prices and Analysis:
- Three higher lows on the daily chart gives Sterling bulls hope.
- GBPUSD needs to stay above all three moving averages to press further ahead.
- Retail remain long GBPUSD – a bearish contrarian signal.
We have recently released our Q3 Trading Forecasts for a wide range of Currencies and Commodities, including GBPUSD with our fundamental and medium-term term technical outlook.
GBPUSD continues to be boosted by positive Brexit tailwinds and buffeted by US monetary policy headwinds, leaving an interesting technical set-up. The daily chart shows the pair making three higher rows in a row and piercing the 50-day moving average that has kept GBPUSD in check since mid-April. The psychological 1.3000 level continues to be a barrier to further upside movement with options expiries likely playing a role. GBPUSD needs to make a clean break and close above the August 30 high at 1.3044 to push further ahead, leaving the July 9 high at 1.3363 the short- to medium-term target. The RSI indicator is trading mid-market and currently pointing higher. The 20-day moving average at 1.2878 currently provides support.
GBPUSD Daily Price Chart (January - September 7, 2018)
Moving averages also play an important role on the four-hour chart with GBPUSD trading above all three, indicating a bullish backdrop for the pair. The 20-day is at 1.2884, the 50-day at 1.2921 and the 200-day one tick higher at 1.2922. To push higher, GBPUSD needs to stay above all three before it can make a run at the 1.3044 target. There is also an interesting gap on the chart between 1.3044 and 1.3068 which may attract bulls. On the downside, 1.2873, made on September 5, should also provide another layer of short-term support.
GBPUSD Four-Hour Chart (July 30 - September 7, 2018)
GBPUSD Client Sentiment
The IG Client Sentiment Indicator shows us that retail are 66.4% long of GBPUSD and are further net-long than yesterday and last week. This gives us a stronger bearish contrarian indicator.
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--- Written by Nick Cawley, Analyst
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