FXEMPIRE
All

GBP/USD Daily Forecast – Sterling Attempts to Hold Above 100-Day Moving Average

GBP/USD broke below important support last week that could be signaling the start of a new downtrend. In the early week, however, the pair is catching a bid from the 100-day moving average.
Jignesh Davda

The technical breakdown in GBP/USD last week was a significant one. The pair fell below a horizontal support level at 1.2960 that acted as support for most of the year and also resistance in the fourth quarter last year.

Of particular importance, was that the pair managed to breakdown despite a jump higher in UK service sector performance. Meanwhile, US jobs data, released on Friday, was mixed. The headline increase in the number of additional people employed was well ahead of expectations. However, the unemployment rate ticked up and average hourly earnings fell a bit short.

There isn’t any market-moving data scheduled for the session ahead, but UK GDP figures will be released on Tuesday. This will provide a first look at how the economy performed in the fourth quarter of 2019 and it is likely to move the exchange rate.

It should be a busy week. Both BoE Governor Carney and Fed Chair Powell will have the opportunity to share their latest views on the economy and monetary policy. Later in the week, the latest US retail sales and CPI data will be released.

Technical Analysis

The breakdown below 1.2960 in GBP/USD seems to suggest that the pair may have reversed from the bullish trend that began in September. So far the 100-day moving average is holding, and this could trigger a bounce.

GBPUSD 4-Hour Chart

How the pair ends the week relative to the mentioned price point will be important.

The pair has been bearish since the gap lower open last week. At this stage, it would take a break above 1.2960 to negate the downside pressure.

GBP/USD briefly broke to a two and a half month low in early trading today but has seen a steady bid since the European open. For the session ahead, the 1.2900 handle is seen as support.

Bottom Line

  • Last week’s price action has attached a strongly bearish view to GBP/USD from a technical perspective.
  • The week ahead is likely to be a volatile one with several market-moving data scheduled for release and testimonies from Powell and Carney.
  • UK GDP will be released in early trading tomorrow.
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US