Sterling (GBP) Weekly Technical Outlook: Taking a Post-Rally Breather
GBPUSD and EURGBP Technical Analysis
We have recently released our Q1 Trading Forecasts for a wide range of Currencies and Commodities, including GBPUSD with our fundamental and medium-term term technical outlook.
GBPUSD Long-Term Moving Average Resistance
GBPUSD has enjoyed a strong run in 2019, picking itself up from a 1.2435 low to touch the 1.3000 level on an improving fundamental backdrop. This year’s mini-rally now sees GBPUSD touching the 200-day moving average and Cable has failed at its first attempt to break and close above here. Another attempt is expected shortly and if successful, the 38.2% Fibonacci retracement level at 1.3177 becomes the next target. This level also coincides with the November 7 high. If this level is closed above, the recent series of lower highs will be broken, adding an additional bullish nudge for the pair. GBPUSD have also made four higher lows in a row, so if 1.2832 – Thursday’s low - remains intact, the chart set-up for GBPUSD remains constructive.
GBPUSD Daily Price Chart (April 2018 - January 18, 2019)
EURGBP Rebound Away From Oversold Territory
EURGBP is pulling back from its recent two-month low print of 0.8762 and is back above 0.8800 as the RSI indicator shows the pair to be oversold in the short-term. Any further rally will meet resistance at 0.8860 – the 50% Fibonacci retracement – just ahead of the 200-day moving average at 0.8884. These levels may prove difficult to break if the fundamental background remains the same, leaving EURGBP vulnerable to a further downturn. Horizontal support at 0.8723 before a re-test of the November 13 low at 0.8655.
EURGBP Daily Price Chart (April 2018 – January 18, 2019)
--- Written by Nick Cawley, Analyst
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