GBPUSD FUNDAMENTAL BACKDROP
The British pound unusually rallied on a missed employment change figure alongside an increase in unemployment (see economic calendar below) due to yesterday’s statement by the Bank of England (BoE) Governor Andrew Bailey. The statement cited wages and prices are rising too quickly and the MPC is squarely focused on wage, inflation and price data respectively.
UK ECONOMIC CALENDAR (GMT +02:00)
TECHNICAL ANALYSIS
GBP/USD DAILY CHART
Chart prepared by Warren Venketas, IG
Price action on the daily cable chart above now leaves the 1.2900 psychological resistance handle exposed which has not been tested prior to April 2022. That being said, the Relative Strength Index (RSI) exhibits bearish/negative divergence whereby prices and RSI readings move in opposing directions, possibly eluding to subsequent downside to come.
Key resistance levels:
- 1.3000
- 1.2900
Key support levels:
- 1.2848
- 1.2680/Trendline support
BULLISH IG CLIENT SENTIMENT
IG Client Sentiment Data (IGCS) shows retail traders are currently net SHORT on GBP/USD with 68% of traders holding short positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment resulting in a short-term upside disposition.
Chat now!
Add a Comment