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GBP/USD Trading Above 200-day SMA Resistance
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On Wednesday, the Bank of England (BoE) released its guidance on its future monetary policy decisions, saying not to raise its key lending rate from its
- On Wednesday, the Bank of England (BoE) released its guidance on its future monetary policy decisions, saying not to raise its key lending rate from its current level at a record low of 0.5% and not to reduce the Asset Purchase Facility that currently stands at 375 billion Pounds until the unemployment rate falls below a threshold of 7%. After the announcement, GBP fell sharply towards 1.5200 against USD before recovering back even sharply to touch day’s high of 1.5530.
- Even recent comments from various Fed Reserve officials that the Fed might be stepping closer to begin tapering its bond-purchase program has also failed to provide any relief in the ongoing weakness for USD.
- Wednesday’s sharp up-move helped GBPUSD currency pair to decisively move above 200-day SMA resistance for the first time after June 19. The pair, later, pulled-back slightly to settle for the day at 1.5492, just below the 1.5500 psychological mark.
- With only weekly jobless claims data, scheduled for release from the US later on Thursday, GBPUSD continued trading with positive bias, decisively holding above the 1.5500 mark.
- From current levels, the pair seems to continue its upward trajectory towards 1.5560 – 1.5570 horizontal resistance zone, that now seems to provide immediate resistance on the upside. Should the pair manage to move even beyond 1.5560 – 1.5570 resistance zone, it might continue strengthening towards 1.5630 resistance zone representing 50% Fibonacci Retracement Level of the pair’s entire downfall from 2009 highs to 2010 lows.
- On the downside, 200-day SMA currently at 1.5440 area now seems to provide immediate support for the currency pair. Should the pair slip below 200-day SMA support, the pair seems to give-up some of Wednesday’s gain and test 1.5400 area, previous strong resistance turned support level also coinciding with 61.8% Fibonacci Retracement Level of 1.5750 – 1.4812 downfall.
About the Author
Haresh Menghaniauthor
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