GBP/USD Technical Analysis – NFP to Set the Pace | Forexlive
On the daily chart below, we can
see that the sellers couldn’t break the neckline of the double
top at
1.1839 on their first try as the buyers defended the level strongly. The divergence between the double top and the MACD generally signals that the
pattern has higher chances of working out.
So, we just need a clear breakout
to confirm it. The moving
averages are acting as resistance for now and the sellers keep leaning on them
to position into the breakout. Today we have the NFP
report, and we can expect a break lower if the data beats expectations or an
extension to the upside if the data misses the forecast.
On the 4 hour chart below, we can
see that the buyers have extended the price towards the previous support zone now turned resistance. It’s very likely that sellers
here will defend the zone as they have also the trendline as a last line of defence. The
selloff caused by Fed
Chair Powell’s comments regarding the chance of a 50bps hike and
a higher terminal rate has been almost entirely erased. This shows how the
market is uncertain and focused more on the economic data.
On the 1 hour chart below, we can
see that the price is now at the resistance zone where we can also find the
61.8% Fibonacci
retracement level of the entire previous downward move. As you
can see there’s also a divergence between the latest spike up and the MACD,
which may signal a possible fakeout in the making.
The sellers should start to pile
in here with the major downward trendline as the last line of defence. More
conservative sellers may want to wait for a break lower of the minor upward
trendline, which should confirm that the selling momentum is increasing, and
the sellers are in control. The buyers will need a break above the major
trendline to start a bigger move towards the 1.2143 level.