Weekly Technical Outlook: GPB/USD; Market Forecasts for May 15th – May 20th

• Resistance level 1.29769
• Pivot Level 1.28402
• Support Level 1.2552, 1.2430 and 1.2365

Technical Analysis

Daily bias in GBP/USD remains bearish with the resistance at 1.29769 having been rejected and intact. A deeper decline is further expected for GBP/USD as long as resistance holds the area. The price action stays below resistance so far at this point and closed the week below the levels.

Such decline is viewed as a correction though we have some support on the trend line which looks weaker. Thus, we’d expect resistance to hold the area and the pair remains bearish this week, indicating that a bearish reversal on the pair has taken place. The outlook for the pair continues with the downside bias price action signaling a two bar reversal indicating a bearish movement.

With the rejection at the resistance area closed below the trend line and the stochastic oscillator currently at 67.0 levels, along with the pair’s closing below the rejection of the trend line, there is clear indication of trend reversal shifting the momentum. Current development suggests that, with the medium term downside, a further low is expected and focus shall be at 1.2252. A break here should make lower lows with 1.2430 levels.

Economic

• Producer Price Index – Output, PPI Core Output, Consumer Price Index
• Claimant Count Rate, Average Earnings including Bonus, ILO Unemployment Rate, Retail Sales
• NAHB Housing Market Index, Building Permits, Industrial Production
• Initial Jobless Claims, FOMC Member Mester speech, Baker Hughes US Oil Rig Count

Area of Interest

• Strong resistance at 1.29769 area and closed below resistance levels.
• Bearish reversal strongly closing below the rejection of trend line with two bar signal.
• Price action closed below trend line and oscillator below 67.0 levels indicating shift in momentum.
• At Flip Area on Daily time frame resistance levels.

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