GBP/USD Buyers Surrender; Can It Recover?
Titan FX | Jan 04, 2016 09:14PM ET
Key Highlights
· British Pound traded lower during the past couple of sessions against the US dollar and dropped towards 1.4660.
· There are a couple of bearish trend lines formed on the hourly chart, which may act as a resistance moving ahead.
· Today, the UK PMI Construction will be released by the Chartered Institute of Purchasing & Supply and Markit Economics with forecast slated for 56.0 in December 2015.
· A resistance on the upside is seen near 1.4740 and support at 1.4700.
GBP/USD Technical Analysis
The GBP/USD pair was seen struggling a lot around the 1.4800-20 resistance area, and there were a couple of major failures resulting in a downside move. The pair traded below the 1.4700 support area once this week and tested the 1.4660 area.
There are a couple of bearish trend lines formed on the hourly chart, representing a major resistance area. Moreover, the 100 and 200 hourly simple moving averages are also situated near it. In short, we can see 1.4800-20 as a pivot area where buyers may struggle if the pair corrects higher.
Currently, the pair is trading near the 38.2% Fib retracement level of the last drop from the 1.4815 high to 1.4662 low. There is a chance that the pair may trade further higher and test the 61.8% Fib level where sellers might appear to defend gains. On the downside, we can keep an eye on the 1.4700 support area, followed by 1.4660.
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