GBP/USD: Cable Buyers May Lose Control Below this Price- GBP vs USD Forecast
GBP/USD Technical Analysis
GBP/USD Price – Buyers Pullback
On Thursday, GBP/USD rallied to 1.3515- its highest level in seven months. The price slipped back later as some buyers exited the market. This week, buyers continued exiting the market leading cable to settle below 1.3200 handle.
The Relative Strength Index (RSI) abandoned overbought territory and fell to 53, reflecting weaker uptrend momentum.
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GBP/USD DAILY PRICE CHART (April 25, 2017 – DEC 18, 2019) Zoomed out
GBP/USD DAILY PRICE CHART (FEB 22 – DEC 18, 2019) Zoomed IN
From the daily chart, we notice on Monday GBP/USD tumbled to a lower trading zone 1.3048 – 1.3300. The price to decline further during the week eyeing a test of the low end of the zone.
A close below the low end could lead buyers to more taking profits operations. This may send GBPUSD towards 1.2965. Further close below this level opens the door for sellers to take charge and press Cable towards the vicinity of 1.2785-75. In that scenario, the daily and weekly support area and levels marked on the chart (zoomed in) should be kept in focus.
That said, any failure in closing below the low end of the zone would be caused from buyer’s hold back from exiting the market. This could reverse the price’s current direction sending it towards the high end of the zone. Further close above this level could send GBPUSD even higher towards 1.3382. Nevertheless, the rally could weaken at the daily resistance area as some buyers could exit the market at these points.
GBP/USD Four Hour PRICE CHART (Oct 15 – DEC 18, 2019)
Looking at the four-hour chart, we notice that yesterday GBP/USD broke below the uptrend line originated from the Nov 29 low at 1.2878. The price tested this trendline however, was not able to close above so far.
A break below 1.3023 could press GBPUSD towards 1.2988. Although, the 1.3000 handle should be considered. On the flip-side, a break above 1.3166 may send cable towards 1.3257. Yet, the daily resistance level underscored on the chart should watched closely.
See the chart to find out more about key levels GBPUSD would encounter in a further bearish /bullish scenario.
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Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.