GBPUSD Weekly Technical Outlook: Seven Weekly Bear Candles Dominate
GBPUSD Technical Analysis
- Will the weekly chart make eight bear candles in a row heading into the Christmas break?
- A fresh 20-month low remains in sight.
GBPUSD Stair-Stepping Lower
The weekly chart highlights Sterling’s weakness against the US Dollar with seven lower highs made in a row. The break of old horizontal support at 1.25891 has opened the way down to 1.2366, a level last seen in early April 2017. This level should provide reasonable, technical, support. Below there, a much deeper drop opens to 1.2109. The RSI indicator points to the market being oversold which may slow any further descent but a weekly close above 1.2765, last week’s high print, is needed to break the current bear market.
GBPUSD Weekly Price Chart (January 16, 2016 - December 14, 2018)
The daily GBPUSD is currently blocked to the upside around 1.2650 – 1.2665, a combination of two lows on August 15 and December 4 and today’s high trade. The sharp reversal on the latest candle leaves this week’s multi-month low of 1.2474 at risk of a re-test. While we are looking at technical points we must remember that Brexit fundamentals – currently very weak - are the only driver of Sterling at present, while the US Dollar continues to press higher on the back of a robust economy. For Sterling’s fortunes to reverse higher, the previously mentioned 1.2650 area needs to be closed above, followed by the 1.2725 to 1.2760 area based on the 20-day moving average and the December 10 high. The RSI indicator is mid-market and sloping lower from the early November high.
GBPUSD Daily Price Chart (May - December 14, 2018)
--- Written by Nick Cawley, Analyst
To contact Nick, email him at firstname.lastname@example.org
Follow Nick on Twitter @nickcawley1
Other Weekly Technical Forecast:
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.