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GBPUSD Weekly Technical Outlook: Sterling Remains Weak

GBPUSD Weekly Technical Outlook: Sterling Remains Weak

2018-12-08 03:00:00
Nick Cawley, Strategist
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GBPUSD Technical Analysis

  • Triangle breakout on the four-hour chart nears.
  • Daily chart signals a re-test of the recent low.

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 – Short-term Breakout Nears

GBPUSD is currently rangebound and stuck within a triangle, pointing to a breakout in the short-term, and the downside looks more likely in the current environment. The pair are currently trading above the 20- and 50-day moving average, but any upside momentum is going to find resistance around 1.2800 – 1.2820. Sterling bulls may point to the recent higher lows being made as a sign of strength but a break below 1.2730 would negate this and leave the pair vulnerable to further falls with the recent multi-month low at 1.2658 the first target.

GBPUSD Four-Hour Price Chart December 7, 2018

GBPUSD Weekly Technical Outlook: Sterling Remains Weak

The daily GBPUSD chart paints a slightly different picture with lower highs dominating. The pair also trade below all three moving averages, with the 20 and 50-day mas providing resistance all the way back up to 1.2822. A break and close below the October 30 low at 1.2694 leaves 1.2658 vulnerable for a re-test.

GBPUSD Daily Price Chart December 7, 2018

GBPUSD Weekly Technical Outlook: Sterling Remains Weak

While the technical outlook may point to lower prices, the IG Retail Sentiment Indicator is suggesting that GBPUSD may move higher. Traders are 63.1% net-long GBPUSD – a bearish contrarian indicator – yet traders are less net-long than yesteday and compared with last week. This suggets that GBPUSD may move higher despite the fact that traders are net-long.

--- 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 and EUR/AUD Trend Lines Broken

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

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