GBP/USD: Another Run At 1.40?
MarketPulse | Feb 18, 2021 12:40AM ET
The pound has continued its impressive run against the dollar in recent weeks, despite the greenback having performed quite well against other currencies.
We’ve seen growing optimism around the UK economy this year following an impressive early rollout of the COVID-19 vaccine which will enable the economy to reopen sooner and the recovery to be more powerful.
Obviously when it comes to the UK, we’re coming from a low base. Only a few months ago, we were facing the possibility of no-deal Brexit at a time when the economy had been among the hardest hit by the pandemic.
What it means now though is that cable is approaching 1.40 and there aren’t many signs of exhaustion in the rally. The stochastic and MACD on the daily chart still look very healthy.
That may of course change the closer we get to that major psychological barrier. For now, the pair has pulled back slightly and key support may be being eyed up as a possible rotation point.
That may have already happened, with the 61.8 fib from 12 Feb lows to 16 Feb highs appearing to have offered some support. But I’m not convinced. If it does push lower again, with the dollar appearing back in favor overall, it’s the longer term fibs on the 4-hour chart that will be of interest to me.
Here, the 38.2-50 fib region falls around the 55/89 SMA band, while the 61.8 fib falls around the 200/233 SMA band, both of which have been important support during this ascent. A break of these may suggest we’re in correction territory.
Original Post
/h2
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.