The underlying long term trend for cable has been bullish. GBPUSD has been in an uptrend since July 2013 and the pair has gained 12% since then.
The daily chart analysis shows GBPUSD has been mostly range-bound in the past four weeks, trading sideways between lows of 1.6567 and highs of 1.6821.
Technical indicators shows that price action has lost momentum; the RSI has levelled off around the 50-point level and the stochastic has declined to below 30. However, the MACD is still in bullish territory above zero while the moving averages are rising and the market is trading above the 55-day and 200-day moving averages, which is a bullish signal.
A downside corrective move should see support at the 50% retracement level of the move up from the Feb 5 low (1.6251) to the Feb 17 high (1.6821). This level comes at 1.6534, which is also around the level where the 55-day moving average converges, so this is considered to be a strong support level.
Below this comes support at 1.6469 (61.8% Fib) and then 1.6374 (78.6% Fib and 100-day moving average confluence).
To the upside, GBPUSD will have to break through resistance at 1.6686 (23.6% Fib) in order to target the Feb 17 high of 1.6821.
Fundamentals will play a role in giving the pair direction, as focus turns to a key event this week. On Wednesday the UK Annual Budget will be released, as well as other data on UK unemployment and MPC bank rate votes.
The underlying long term trend for cable has been bullish. GBPUSD has been in an uptrend since July 2013 and the pair has gained 12% since then.
The daily chart analysis shows GBPUSD has been mostly range-bound in the past four weeks, trading sideways between lows of 1.6567 and highs of 1.6821.
Technical indicators shows that price action has lost momentum; the RSI has levelled off around the 50-point level and the stochastic has declined to below 30. However, the MACD is still in bullish territory above zero while the moving averages are rising and the market is trading above the 55-day and 200-day moving averages, which is a bullish signal.
A downside corrective move should see support at the 50% retracement level of the move up from the Feb 5 low (1.6251) to the Feb 17 high (1.6821). This level comes at 1.6534, which is also around the level where the 55-day moving average converges, so this is considered to be a strong support level.
Below this comes support at 1.6469 (61.8% Fib) and then 1.6374 (78.6% Fib and 100-day moving average confluence).
To the upside, GBPUSD will have to break through resistance at 1.6686 (23.6% Fib) in order to target the Feb 17 high of 1.6821.
Fundamentals will play a role in giving the pair direction, as focus turns to a key event this week. On Wednesday the UK Annual Budget will be released, as well as other data on UK unemployment and MPC bank rate votes.
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