We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
GBP/USD Technical Analysis: Is a New Trend Setting In?

GBP/USD Technical Analysis: Is a New Trend Setting In?

2016-11-11 14:40:00
James Stanley, Currency Strategist
Share:

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Talking Points:

  • GBP/USD Technical Strategy: Intermediate-term showing up-trend potential.
  • The British Pound has been strongly-bid ever since last week’s Super Thursday announcement at the Bank of England. And even with a stronger U.S. Dollar, GBP/USD continues to set new short-term highs.
  • If you’re looking for trading ideas, check out our Trading Guides.

In our last article, we looked at the shifting paradigms in GBP/USD after last week’s Super Thursday batch of announcements saw the Bank of England remove the dovishness that was continuing to drive the Sterling lower. By acknowledging that higher inflation is being expected in the U.K., the bank effectively warned markets that additional rate cuts may not be in the cards, and ever since, Sterling has traded with a rather aggressive bid.

Of particular interest is the fact that this week’s price action has seen strength in the U.S. Dollar, yet GBP/USD has still run to higher-highs; indicating that even though the Greenback has been getting accumulated, the rate of buying in GBP has been even stronger and more brisk. This could setup a fairly attractive scenario should USD find an element of weakness so that stronger bid in the British Pound could drive prices on the pair higher.

Now that we have the possibility of up-trend continuation, traders would likely want to look for support to develop before triggering long, and there are a series of levels to watch for in the early portion of next week for that support to begin to form. At 1.2087, we have the ‘post-Flash Crash swing-low,’ and if prices fall below this level, that would invalidate the bullish bias as lower-lows would be printing. A bit higher at 1.2328 we have the swing-high from mid-October/early November, and this had given the most recent swing low along with support during the reversal around U.S. Presidential elections. But the more attractive area for that higher-low to develop would likely be the zone around 1.2500 in the pair, as this is a confluent level that had provided multiple points of resistance before the trend burst-higher; and as of yet this level has not been tested for support after the breakout.

Given recent strength in the Greenback, that support could come into play fairly quickly; and stops on potential long positions can be cast to the deeper swing low in the effort of catching the next swing-higher.

GBP/USD Technical Analysis: Is a New Trend Setting In?

Chart prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES

News & Analysis at your fingertips.