Technical Analysis – GBPUSD bears still hold the upper hand
October 23, 2023 3:27 pm
GBPUSD edges higher today but continues to respect the July 14, 2023 trendline
It has been exhibiting lower volatility lately, partly due to busy calendar ahead
Momentum indicators could turn more bearish soon
GBPUSD is trading higher today and it has been spending its last few sessions in the 1.1957-1.2287 region, respecting the July 14, 2023 descending trendline. The market appears to be in waiting mode ahead of this week’s key events – primarily the US GDP release – and the unfolding geopolitical developments.
In the meantime, the momentum indicators are somewhat on the bears’ side. The RSI continues to hover below its midpoint while the Average Directional Movement Index (ADX) is stuck below its threshold and thus signaling the absence of a strong trend in the market. More interestingly, the stochastic oscillator is fighting with its moving average around its midpoint. The outcome of this battle could determine the next leg in GBPUSD.
Should the bears remain confident, they could try to stage a sell-off towards the September 3, 2019 low at 1.1957. Even lower, they could have the chance of testing the support set by the 1.1759-1.1824 area, populated by the 38.2% Fibonacci retracement of the June 1, 2021 – September 26, 2022 downtrend and the July 14, 2022 low. If successful, GBPUSD could finally trade below the year-long rectangle.
On the flip side, the bulls are desperately trying to put a stop to the recent bearish trend. They are keen on pushing GBPUSD to 1.2287 and then gradually stage a rally towards the 1.2393-1.2439 area, set by the January 3, 2019, the 50- and 200-day simple moving averages (SMAs). If successful, they could then set sail for the 100-day SMA at 1.2582.
To conclude, GBPUSD is recording muted moves over the last few sessions despite the strong efforts from the bulls to stage a move towards the 1.2393 area.
GBPUSD edges higher today but continues to respect the July 14, 2023 trendline
It has been exhibiting lower volatility lately, partly due to busy calendar ahead
Momentum indicators could turn more bearish soon
GBPUSD is trading higher today and it has been spending its last few sessions in the 1.1957-1.2287 region, respecting the July 14, 2023 descending trendline. The market appears to be in waiting mode ahead of this week’s key events – primarily the US GDP release – and the unfolding geopolitical developments.
In the meantime, the momentum indicators are somewhat on the bears’ side. The RSI continues to hover below its midpoint while the Average Directional Movement Index (ADX) is stuck below its threshold and thus signaling the absence of a strong trend in the market. More interestingly, the stochastic oscillator is fighting with its moving average around its midpoint. The outcome of this battle could determine the next leg in GBPUSD.
Should the bears remain confident, they could try to stage a sell-off towards the September 3, 2019 low at 1.1957. Even lower, they could have the chance of testing the support set by the 1.1759-1.1824 area, populated by the 38.2% Fibonacci retracement of the June 1, 2021 – September 26, 2022 downtrend and the July 14, 2022 low. If successful, GBPUSD could finally trade below the year-long rectangle.
On the flip side, the bulls are desperately trying to put a stop to the recent bearish trend. They are keen on pushing GBPUSD to 1.2287 and then gradually stage a rally towards the 1.2393-1.2439 area, set by the January 3, 2019, the 50- and 200-day simple moving averages (SMAs). If successful, they could then set sail for the 100-day SMA at 1.2582.
To conclude, GBPUSD is recording muted moves over the last few sessions despite the strong efforts from the bulls to stage a move towards the 1.2393 area.
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