GBP/USD Technical Analysis | Forexlive
On the daily chart below, we can
see how the US Dollar has been losing ground consistently since October 2022.
Being one of the most crowded trades in 2022, the US Dollar got sold off very
heavily as the market started to price in a less hawkish Fed with an earlier
than expected pause.
Those expectations though are
dwindling as the recent NFP report and ISM
Services PMI showed a resilient economy. The culprit may be the
easing in financial conditions we saw since November with treasury yields
slumping and the stock market rallying.
The double
top formed
at the 1.2450 resistance may signal a big shift in expectations now that the
Fed members started to hint to a possible higher terminal rate and the market
adjusts to the new developments.
If the price breaks the neckline
at 1.1845, the double top would be confirmed, and we may see a big fall to
1.1200.
On the 4 hour chart below, we can
see that the price is now pulling back after the big sell off seen out of the
NFP and ISM Services PMI reports. The best confluence zone would be at 1.2263 where we
have the swing resistance and the 61.8% Fibonacci
retracement level.
There’s no important economic data today, so the technicals should
lead until tomorrow when we will get the US Jobless Claims report.
On the 1 hour chart below, we can
see more clearly the current price action. The divergence between the price and the MACD signalled a loss of selling
momentum and we got the pullback that is currently extending up to the 38.2% Fibonacci
retracement level.
That would be the first resistance level where sellers may try to
re-enter the market. As previously mentioned though a stronger resistance level
would be at 1.2263 where we have confluence of 61.8% Fibonacci level and the
swing resistance.