GBP/USD tries to cross 55-hour SMA
Updated
Morning outlook - GBP/USD tries to cross 55-hour SMA
Despite the release of better that expected American income data, the Greenback failed to exploit this fundamental background and eventually depreciated against the Pound. At the moment, the pair is going to start testing a combined resistance set up by the upper trend-line of a recently formed descending channel and the 55-hour SMA.
As majority of traders remain bullish, the rate might briefly sneak to the top, trying to reach the 38.2% Fibonacci retracement level at 1.3145. However, an aggregate of technical indicators points out on the further downfall of the rate via sending strong sell signal. This direction seems evident also from larger perspective, as a couple of weeks ago the pair made a rebound from the upper boundary of a long-term descending channel.
Despite the release of better that expected American income data, the Greenback failed to exploit this fundamental background and eventually depreciated against the Pound. At the moment, the pair is going to start testing a combined resistance set up by the upper trend-line of a recently formed descending channel and the 55-hour SMA.
As majority of traders remain bullish, the rate might briefly sneak to the top, trying to reach the 38.2% Fibonacci retracement level at 1.3145. However, an aggregate of technical indicators points out on the further downfall of the rate via sending strong sell signal. This direction seems evident also from larger perspective, as a couple of weeks ago the pair made a rebound from the upper boundary of a long-term descending channel.
Note
GBP/USD tries to get back to 1.32In result of the previous trading session, the Pound managed to break through a combined resistance level formed by the 55-hour SMA and the upper edge of a descending channel that was additionally backed up by the 38.2% Fibonacci retracement level.
During the surge, the pair has formed a junior ascending channel that together with the bullish market sentiment is likely to elevate the pair to the 1.3200 or even 1.3250 levels. However, in order to reach these targets the Pound needs a release of better than expected data about the UK manufacturing activity.
In larger perspective, there is a need to take into account that the pair is moving in a general downtrend that is continuously fuelled by ineffectual Brexit talks.
Note
GBP/USD fluctuates near 1.32Due to release of better than expected data on the UK manufacturing production, the pair continued to climb to the top and even managed to bypass the 1.32 mark. However, then the surge was neutralized by the 200-hour SMA, which forced the rate to start moving in the opposite direction.
To certain extent, this turnaround was related to anticipation of the Fed Meeting Minutes, which is expected to show a hawkish stance on interest rate hike in December. Before this event, the currency rate is unlikely to make major advances in southern direction, as it is protected by a bunch of technical indicators, such as the weekly PP, the 55- and 100-hour SMAs as well as the 38.2% Fibonacci retracement level. But then traders’ reaction might push the pair to a zone near the 1.3110 mark.
Note
GBP/USD bypasses 200-hour SMAIn accordance with expectations, the currency exchange rate was consolidating before a release of the Fed meeting minutes. But as soon as this document was released, the pair expectedly sneaked through the 200-hour SMA and started to surge.
The fact that road to the south is obstructed not only by a combination of the 55- and 200-hour SMAs but also by the 100-hour SMA and the weekly PP suggests that the Greenback is unlikely to restore lost positions against the Pound even in case of better than expected US PPI data release. Accordingly, traders with bullish outlook most probably are going to try to push the pair to the area between the 1.3300 mark and the monthly PP at the 1.3320 by the end of the week.
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