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GBPUSD Weekly Technical Outlook: Sterling Probes New Lows

GBPUSD Weekly Technical Outlook: Sterling Probes New Lows

2018-12-01 03:00:00
Nick Cawley, Strategist
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GBPUSD Technical Analysis

  • Recent lows may be revisited soon.
  • Daily and four-hour charts dominated by lower highs.

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.

GBPUSD Charts Favor Bear Traders

GBPUSD is difficult to trade in the current climate with the market dominated by fundamentals more than technical analysis. If we look at the charts without the Brexit overhang, they highlight repeated lower highs and are approaching important support levels ahead of fresh multi-month lows.However, Brexit remains the only market driver so care needs to taken if you are considering taking a Sterling position.

The four-hour chart has just broken below both the 20- and 50-day moving average and is testing a horizontal support zone between 1.2695 and 1.2725. Below here the multi-month low at 1.2662 becomes important if GBPUSD is to try push higher. The RSI indicator is also pointing lower and is not yet in oversold territory. Lower highs dominate, and a descending wedge pattern is nearing completion.

GBPUSD Four-Hour Price Chart November 30, 2018

GBPUSD 4-HOUR CHART

The daily chart is also a full pull-back of the April 17 – August 15 move between 1.4377 and 1.2662 and again trades below all three moving averages. The RSI indicator is mid-market and moving lower with the 1.2662 – 1.2725 zone again crucial support. There is strong resistance between 1.2856 and 1.2955 made up of the 20- and 50-day moving averges and the October 3-4 double touch lows at 1.2786. All moves will be directed by Brexit newsflows but a sharp break lower cannot be ruled in the coming days.

GBPUSD Daily Price Chart November 30, 2018

GBPUSD DAILY CHART

--- Written by Nick Cawley, Analyst

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

Follow Nick on Twitter @nickcawley1

Other Weekly Technical Forecast:

Australian Dollar Forecast: AUD/USD, AUD/JPY May Fall as EUR/AUD Gains

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

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