Cable traded a tight 30-pip range in the Asian session today, with congestion around 1.6582, which is the 23.6% Fibonacci retracement level of the up-leg from the January 17 low (1.6308) to the January 24 high (1.6667). This level is an important turning point for the pair which could turn to the upside or downside.
GBPUSD has tested the key 1.6600 level several times in the past week but has remained capped below this strong resistance level. Tuesday’s UK Q4 GDP data (in-line with expectations at 0.7%) provided another catalyst for a decline.
However, there have not been any large sell-offs and the pair remains above both moving averages (SMA20 and SMA50) on the 4-hour chart, as well as above its uptrend line from the January 17 low. Near-term resistance is at the 1.6645 and 1.6667 (January 24 high) area. A break above the high will confirm the bullish scenario.
Meanwhile, technical indicators are providing mixed signals. RSI has flattened out just around the mid-point at 50 while the stochastic has dropped to 56. Immediate support is seen at 1.6530 (38.2% Fibonacci). A break below this exposes next support at 1.6473 and 1.6445.
Aside from the technicals, BOE Governor Mark Carney’s speech later today could be a risk event for the pound.
Cable traded a tight 30-pip range in the Asian session today, with congestion around 1.6582, which is the 23.6% Fibonacci retracement level of the up-leg from the January 17 low (1.6308) to the January 24 high (1.6667). This level is an important turning point for the pair which could turn to the upside or downside.
GBPUSD has tested the key 1.6600 level several times in the past week but has remained capped below this strong resistance level. Tuesday’s UK Q4 GDP data (in-line with expectations at 0.7%) provided another catalyst for a decline.
However, there have not been any large sell-offs and the pair remains above both moving averages (SMA20 and SMA50) on the 4-hour chart, as well as above its uptrend line from the January 17 low. Near-term resistance is at the 1.6645 and 1.6667 (January 24 high) area. A break above the high will confirm the bullish scenario.
Meanwhile, technical indicators are providing mixed signals. RSI has flattened out just around the mid-point at 50 while the stochastic has dropped to 56. Immediate support is seen at 1.6530 (38.2% Fibonacci). A break below this exposes next support at 1.6473 and 1.6445.
Aside from the technicals, BOE Governor Mark Carney’s speech later today could be a risk event for the pound.
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