Oct 21, 2022

VOT Research Desk

In the first part of the European session on Friday, the GBP/USD pair experiences some fresh selling pressure and falls to a low that surpasses one week. The poor UK Retail Sales data, which indicate that consumers are feeling the pain of the cost-of-living issue and rising inflation, are weighing down the British pound.

In reality, according to data released on Friday by the UK Office for National Statistics, retail sales fell by 1.4% in September, exceeding expectations that they would have fallen by 0.5%. In contrast to the predicted 5.0% decline, sales fell -6.9% during the reporting month on an annualized basis.

Additionally, September saw a 6.2% YoY decline in core sales compared to a -4.1% forecast and a -5.3% decline in August.

This is related to the recent political unrest in the UK and keeps sterling from strengthening.

Technically, the overnight intraday upswing stalled close to a downward sloping trend-line that dates back to late August.

The likelihood of a further decline and acceptance below the 1.1200 round-figure levels confirms the gloomy prognosis.

As a result, there is still a chance that there will be a follow-through decline towards the next important support, which is around the 1.1100 level.

In order to reach the psychological level of 1.1000, the bearish trend might be prolonged further and push the GBP/USD pair into the 1.1055-1.1050 intermediate support.

On the other hand, momentum that returns over the 1.1200 level is expected to run into significant resistance close to the 1.1250-1.1260 area.

A persistent rise above might start a rebound for short-covering, allowing the GBP/USD pair to retake the 1.1300 level.

Any upward movement beyond that, however, may encounter new sellers close to the fore mentioned trend line, which is now located close to the 1.1350-1.1355 area.

Oct 20, 2022

VOT Research Desk

During the Asian session on Thursday, the GBP/USD pair moves back toward the lower end of its weekly range while displaying some resistance below the 1.1200 round-figure level.

However, the minor intraday rally encounters some supply ahead of the mid-1.1200s due to the general bullish outlook for the US dollar.

Rising US Treasury bond rates continue to be supported by firming views that the Federal Reserve would stay to its aggressive rate-hiking cycle to contain inflation, which benefits the dollar.

In addition, a lower risk sentiment provides extra support for the safe-haven dollar and should limit the upside for the GBP/USD pair in the face of UK political instability.

On the other hand, the daily peak, at 1.1240, appears to be acting as a current immediate barrier that, if overcome, might result in a rebound for short-covering. However, any future upward movement is expected to draw new sellers close to the 1.1300 level.

As a result, the upside should be limited at the 1.1335–1.1345 range. The aforementioned trend-line resistance comes next in line.

Oct 14, 2022

VOT Research Desk

After ending a five-day losing skid on Wednesday, the GBP/USD currency pair has since begun to trade sideways in a small channel at 1.1100.

The results of the Bank of England’s (BoE) daily repurchase operations and the US Consumer Price Index (CPI) statistics may increase the volatility of the pair in the afternoon. The British pound appears to be holding its own against foreign currencies in the second part of the week, reportedly under pressure from top Conservative lawmakers to reconsider the mini budget and make revisions.

GBP/USD is now trading at about 1.1309 and is flat for the day, but if Thursday’s high is not broken in the next hours and throughout the duration of Friday’s sessions, there is a possibility of a move down.

The Relative Strength Index (RSI) signal on the four-hour chart is nudging over 50, which indicates that GBP/USD is attempting to become bullish in the near term, according to the technical view.

The pair also finished the most recent four-hour candle well above the 100-period SMA.Before aiming for 1.1200 (psychological level, 50-period SMA) and 1.1230 (Fibonacci 23.6% retracement), the pair has to pass 1.1140 (Fibonacci 38.2% retracement level of the most recent rally).

On the downside, the Fibonacci 50% retracement level at 1.1030 serves as the first level of support before 1.1000.

An protracted decline approaching 1.0920 (the Fibonacci 61.8% retracement) may be possible if the four-hour closing falls below the latter.

Oct, 13 2022

VOT Research Desk

According to experts at Credit Suisse, the pair still exhibits notable fragility, raising the possibility of a swift return to those lows.

GBP/USD is still up 6% from its previous month’s record low of 1.0350.  Given the vast number of players that must collaborate flawlessly in order to prevent more confusion.

UK monetary and fiscal policy is acting at odds with one another, and the potential for errors that cause instability is high.

Forecasts indicate that the headline US CPI is anticipated to decline from 8.3% YoY to 8.1% YoY. The more significant CPI ex-Food & Energy, however, is forecast to rise to 6.5% YoY from its earlier level of 6.3% and may favor further negative for the GBP/USD pair.

Talk about the Bank of England’s (BOE) program for purchasing gilts will also be crucial for immediate directions.

If UK markets decline the next week, Old Lady will be to blame, claimed UK’s Kwarteng early on Thursday.

The news added to other risk-averse factors, such as higher US Treasury rates and concerns about China and the coronavirus that were already weighing on the GBP/USD exchange rate.

It should be emphasized, however, that the same puts more pressure on the BOE to declare a higher rate rise, as seen by money market wagers that the BOE will raise rates by a full percentage point at the May monetary policy meeting.

The GBP/USD pair’s fall is constrained by the same.

Oct 12, 2022

VOT Research Desk

During Tuesday’s European trading hours, GBP/USD was able to surpass 1.1050 and into the green after briefly testing 1.1000 earlier in the afternoon. The pair may continue its comeback if it is able to overcome the 1.1140 resistance, according to the short-term technical forecast.

However, it would be challenging for the pair to build positive momentum given the risk-averse market climate.

GBP/USD has to move above psychological support at 1.1100 (20-period SMA on the four-hour chart) and resistance at 1.1140 (Fibonacci 38.2% retracement level of the most recent advance, 100-period SMA) in order to draw buyers.

A closing four hours earlier than the latter might allow for an additional leg upward toward 1.1200. (Psychological level, 50-period SMA).

To validate the positive tilt in the near-term technical picture, the Relative Strength Index (RSI) indicator on the same chart should ideally go over 50.On the downside, 1.1000 (a psychological level) and 1.0920 (a Fibonacci 61.8% retracement) serve as temporary supports before 1.1030 (the Fibonacci 50% retracement of the most recent upswing).

Oct 11, 2022

VOT Research Desk

The majority of my technical expectation is still in place despite yesterday’s lacklustre price movement (italics)In the medium run, negative players are still in control and may target the bottom of February 1985 at $1.0520 (and the record low of $1.0357), according to chart analyses.

Now, the H1 timeframe’s focus is on the potential for a $1.10 break and the likelihood of further selling to at least $1.09. As a result, a retest of $1.11’s lower level may reveal negative information for short-term sellers.

After reaching a high of $1.1495 on Wednesday, the British pound continued to lose ground against the US dollar on Monday, extending the retracement from the previous week.

Along with the technical situation, the strong dollar bid—supported by views that the Fed would keep raising rates—projects additional GBP/USD loss.

In the technical briefing on Monday, I made the following observation on the weekly period (italics): The market activity on the weekly timescale emphasizes a negative situation. Of course, the most prominent technical finding is the unmistakable negative trend that has been present since the price peaked at $1.4250 in June 2021.

For those who favor candlestick analysis, this bearish pattern, together with the nearby technical factors indicated above, intensifies the weekly negative trend.

Sep 28, 2022, 10:00PM+7:00

VOT Research Desk

Analytical Viewpoint

Daily Pivots: (S1) 1.0645; (P) 1.0742; (R1) 1.0829;

The short-term low of 1.0351 has not been broken, and the intraday bias for GBP/USD is neutral.

 Upside should be constrained by the 4 hour 55 EMA even though a stronger recovery cannot be ruled out (now at 1.1051). If 1.0351 is broken, the larger downward trend toward parity will resume.

In the big picture, the decline from the 2018 high of 1.4248 is restarting the long-term downward trend from 2.1161. (2007 high). The next goal is a 100% projection from 1.7190 at 0.9532 to 2.1161 at 1.3503.

 As long as the 1.1759 support turned resistance remains, there is no chance of a medium-term rebound.

Sep 27, 2022, 09:00PM+7:00

VOT Research Desk

Analytical Viewpoint GBP/USD

Daily Pivots: (S1) 1.0381; (P) 1.0655; (R1) 1.0962; 

GBP/USD is continuing to consolidate above the transient low of 1.0351. Intraday bias initially remains neutral.

The danger will remain on the downside as long as the 1.1404 support turned resistance remains, while a larger rebound cannot be ruled out.

 If 1.0351 is broken, the bigger downward trend toward parity will resume.

In the big picture, the decline from the 2018 high of 1.4248 is restarting the long-term downward trend from 2.1161. (2007 high).

 The next goal is a 100% projection from 1.7190 at 0.9532 to 2.1161 at 1.3503. As long as the 1.1759 support turned resistance remains, there is no chance of a medium-term rebound.

Sep 27, 2022, 09:00AM+7:00

VOT Research Desk

Analytical Viewpoint GBP/USD

Daily Pivots: (S1) 1.0750; (P) 1.0764; (R1) 1.1405;

GBP/USD is in unchartered territory, having never traded this low since the currency was floated in 1972.

Not surprisingly, bearish momentum signals are strong and might indicate further weakness is possible.

A bearish triple moving average (TMA) formation requires the price to be below the short term simple moving average (SMA), the latter to be below the medium term SMA and the medium term SMA to be below the long term SMA.

All SMAs also need to have a negative gradient.

Looking at any combination of SMAs, the criteria for a TMA in GBP/USD have been met.

Resistance might be at the break points at 1.1405 and 1.1414.