- February 11, 2020
- Posted by: cabana-admin
- Category: Forex Broker
Overview:- GBP/USD is trading below 1.29, struggling amid concerns of a no-trade-deal Brexit and reports of infrastructure spending. The US dollar remains robust amid upbeat data and corona virus headlines.
By analyzing the daily technical chart we can see that pair is heading south side and marked a low of 1.2881 which means it is rising up with a full of bearish momentum. Presently pair is doing very well for sellers and it is making successively lower lows and lower lows as it is trading in purely downtrend, which indicates that further downfall is still awaited. The 1.3300 level is a psychological level so we will get further bearish signal below 1.2850 level and a daily closing below this level will open the way towards the 1.2700 level also.
Fundamental Analysis:- The GBP/USD pair failed to capitalize on its early uptick to levels just above mid-1.2900s and turned lower for the third consecutive session on Friday – also marking its fourth day of a negative move in the previous five. The British pound remained depressed on the back of concerns that Britain might crash out of the European Union at the end of the transition period later this year. This coupled with sustained US dollar strength further aggravated the bearish pressure and contributed to the pair’s downfall to the lowest levels since late November.
The greenback continued with its recent bullish and got an additional boost on Friday following the release of stronger than expected headline NFP print, which showed that the US economy added 225K new jobs in January. The reading helped offset a modest uptick in the unemployment rate and a slight disappointment from average hourly earnings. The mixed US employment details little to dampen the prevailing bullish sentiment surrounding the buck and continued exerting pressure on the major.
The finally ended the day near the lower end of its weekly trading range, below the 1.2900 round-figure mark, and remained depressed near the mentioned handle through the Asian session on the first day of a new trading week. In absence of any major market-moving economic releases, either from the UK or the US, the incoming Brexit-related headlines might continue to influence the broader market risk sentiment surrounding the sterling and produce some meaningful trading opportunities.
Technical Analysis:- Overall bears are driving the car and heading the south side with full of bearish momentum. Some follow-through selling below the mentioned support would expose the 1.2830-25 horizontal support ahead of the 1.2800 round-figure mark. The downward momentum could further get extended towards 50% Fibonacci level, around the 2735-30 region, en-route the very important 200-day SMA support – sub-1.2700 levels.
On the flip side, the 1.2960 horizontal level now seems to act as an immediate strong resistance, above which the pair is likely to aim towards reclaiming the key 1.3000 psychological mark. Any subsequent recovery is likely to confront some fresh supply and should remain capped near the 1.3025-25 resistance zone.
We will keep our view bearish on the pair as long as 1.3000 level remains intact. Odds are in favor of bears and intraday bias remains bearish on pair. Pair is moving below the minor and major EMA lines which is providing us bearish signal. The bearish crossover on MACD indicator is providing us bearish signal. .RSI has turned down below 50 territory which suggests go for short with tight stop loss.
What next:- The 1.3000 level is immediate resistance level followed by 1.3050 whereas 1.2850 level is strong key support level followed by 1.2800 level.
Trade idea:- Based on chart and studies above we can suggest that sell the pair around current levels 1.2895 target is 1.2850 and 1.2800 sl is 1.2950 level.