Technical Analysis – GBPUSD turns south after reaching 200-day SMA
- Melina Deltas
GBPUSD is reversing following the advance to the 1.3745 level, which represents a nearly three-month high. Although the price declined following the touch of the 200-day simple moving average (SMA), it remains above the long-term declining channel. The MACD oscillator is still holding above its trigger line in the positive region with weak momentum, while the RSI is flattening above the neutral threshold of 50.
If the pair continues to fall, immediate support might be found near the 38.2% Fibonacci retracement level of the decline from 1.4248 to 1.3165 at 1.3583, before meeting the 20-day SMA at 1.3535. If selling pressure remains, traders may consider the 23.6% Fibonacci level of 1.3425, which is located above the inside swing high of 1.3370 and the one-year low of 1.3165.
In the alternative scenario, a rally above recent highs could take the currency to the 61.8% Fibonacci level of 1.3838 and then to the 1.3910 barrier. Even higher, the psychological number of 1.4000 may put an end to bullish moves.All in all, GBPUSD has largely maintained a bullish bias since the bounce from 1.3165, although the recent bearish days may portend a negative correction.
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.