Market Considerations and Analytics
Key Notes
- As bullish impetus weakens, the GBP/USD pair declines from significant resistance.
- In preparation for the event risk next week, the pound dollar is facing technological challenges.
- The FOMC and BoE (Bank of England) prepare for additional rate increases, and any unexpected moves could function as a stimulus for market movement.
GBP/USD TECHNICAL EXAMINATION
As the upward impetus slows, the British pound is beginning to display indications of weakness against with the dollar. The middle of the 2021–2022, where bulls have driven GBP/USD into a block of resistance at 1.230, is still crucial for the upcoming move.
Inability to maintain above this mark after this week’s high of 1.2345 encouraged bears to intervene, pushing prices down. The 200-day MA (moving average) is acting as support at 1.212 as price activity falls into a constrained area of technical significance.
A break of the existing support or resistance could trigger the short-term move, as the main currency pair is now trading near the crucial psychological level around 1.220.
The 50-week MA (moving average) is located slightly above approximately 1.240 on the weekly chart, which shows how the 1.23 handle has served as support and resistance for previous advances.
A breach of 1.23 and 1.24 might lead to prices moving back to the next important psychological milestone of 1.250, which would help bulls continue driving a wider rebound.
Even more price pressure and a break under 1.212 might accelerate the decline back to 1.176, though, if prices drop beneath 1.220.
real-time information on retail trader positions that can draw attention to probable extremes in crowd behavior. As of this writing, data from retail trader’s reveals that 44.57% of speculators are net long, with both a short-to-long ratio of 1.24 to 1.
We normally adopt a contrary stance to popular opinion, but the fact that traders are a little less net-short on GBP/USD than they were in the last week shows that we have an even further muddled trading inclination.
