News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
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
USD/JPY
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
More View more
Real Time News
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: France 40: 0.02% Wall Street: -0.00% US 500: -0.00% FTSE 100: -0.01% Germany 30: -0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/kcHJfJfsUb
  • RT @IG_US: Watch @GuyAdami & @RiskReversal Discuss: ✅Vaccine ✅Economic Data ✅Rates ✅Stimulus ✅Crypto With Guest @PeterHanksFX from @DailyF…
  • GBP/USD continues to climb back towards 1.40 $GBPUSD https://t.co/On4fkVULFQ
  • The US Dollar is in a pretty messy state at the moment, especially from short-term vantage points. Get your $USD market update from @JStanleyFX here:https://t.co/NfbIpD4yPj https://t.co/V3Fg0WpQHi
  • today's webinar ready to go -> https://www.dailyfx.com/forex/video/live_events/2021/03/02/us-dollar-price-action-setups-usd-gbpusd-gbp-usd-usdjpy-usd-jpy-audjpy-aud-jpy.html https://t.co/wlXd4DqoNu https://t.co/xxuiNHzCp2
  • AUD/USD on the rise prior to Australia's Q4 GDP print $AUDUSD https://t.co/2lgNJYkbWV
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Gold: 0.58% Silver: 0.51% Oil - US Crude: 0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/bRXxRZST1Z
  • US Senate Majority Leader Chuck Schumer says there are enough votes needed to pass President Joe Biden's $1.9-trillion stimulus bill. $SPX $NDX $DJI $RUT
  • OPEC+ members reportedly said to cool down oil market with increased production. WTI crude oil prices down nearly -6% from last week's high, currently hovering around $60/bbl. $CL_F $USO #OOTT https://t.co/mvATw1o4Ws
  • OPEC+ set to cool oil market with increased production - BBG
GBP/USD Technical Analysis: Constructively Bullish

GBP/USD Technical Analysis: Constructively Bullish

James Stanley, Senior Strategist

GBP/USD Technical Analysis: Constructively Bullish

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

  • GBP/USD Technical Strategy: Near-term bullish prospects remain in GBP; GBP/USD range-bound despite the U.S. Dollar’s relentless top-side breakout.
  • Cable is continuing to find support and resistance inflections off of the Fibonacci retracement that we discussed last week.
  • If you’re looking for trading ideas, check out our Trading Guides.

In our last article, we looked at how the British Pound was one of the few currencies around-the-world that was as strong as the U.S. Dollar during the currency’s blistering bullish move in the month of November. While the Dollar was breaking-higher to set fresh 13-year highs, GBP/USD remained in a relatively tight range, highlighting the fact that while the U.S. Dollar was strong, so was the British Pound.

And given the context of the environment, this made sense. The British Pound fell aggressively around Brexit, and in the aftermath, the Bank of England talked up extremely dovish policy measures which drove the currency even-lower. For much of October, there was little reason to be bullish on Sterling given this extremely bearish backdrop, accented with a great deal of uncertainty around how Brexit might actually get executed. But as we warned in mid-October, rising inflationary forces in response to this ‘sharp repricing’ in the value of the British Pound could potentially stem the Bank of England’s overt-dovishness.

Towards the end of October, bearishness appeared to be starting to dry-up; and in early November we saw the Bank of England begin to acknowledge the stronger-pace of inflation, and matters haven’t really been the same for the British Pound ever since.

November’s Super Thursday batch of announcements saw the British Pound breakout above a key zone of prior resistance at 1.2325, putting in the first bullish indication for the pair since the ‘flash crash’ even in early-October. Two weeks later this area of prior resistance came-in as support, and this led to another run of higher-prices that saw another fresh-high come-in around the 1.2750 psychological level.

After multiple rebukes at the 1.2750 area of resistance, price action has begun to retrace-lower. At this point, traders looking to get-in on the up-trend in Cable are likely looking for that next higher-low; and the post-Brexit Fibonacci retracement can still be helpful for such an approach. This Fibonacci retracement can be found by connecting the high on September 22nd to the low on October 6th. The 50% retracement of that move at 1.2513 helped to set resistance while the pair was showing range-bound tendencies in the face of last month’s Dollar-strength, and given this level’s proximity to the major psychological level at 1.2500, this could be an opportune zone to look for that next area of ‘higher-low’ support.

On the resistance side of Cable, traders would likely want to use the 61.8% level at 1.2656 from that same retracement that had helped to set a prior swing-high in November. The major psychological level at 1.2750 becomes another potential resistance level given the recent reaction, and the 76.4% retracement at 1.2834 could be a third level to watch for resistance and for profit target placement.

GBP/USD Technical Analysis: Constructively Bullish

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