Daily Technical and Trade Outlook – GBP/USD

GBP/USD Daily Technical Outlook

Last updated at May 20, 2022 00:48GMT

Daily trend chart

Down

Daily indicators

Rising fm o/s.

21 HR EMA

1.2452

55 HR EMA

1.2420

Trend hourly chart

Short term.

Time indicators

Bearish divergences.

13 HR RSI

55

IMD 2 p.m.

+ve

Daily analysis

Another retreat climb b4 strg.

Resistance

1.2581 - May 05 European high.
1.2535 - 38.2% r of 1.3147-1.2156.
1.2524 - Nearly 2-week high on Thursday.

Support

1.2435 - Wednesday's NY high (now sub).
1.2394 - Thur European morning high (now sup).
1.2330 - Wednesday's low.

GBP/USD - 1.2461.. Although the Cable swung sideways in tandem with the Euro on Thursday, price caught a bid at 1.2339 early in European trading n rallied to the 1 high .2501 Wednesday to 1.2524 New York morning b4 pulling back on profit taking.

Overall, despite the Cable's brief pause between the post-Brexit low of 1.1491 in 2016 and a nearly 35-year low of 1.1412 in mid-March 2020 on USD safe-haven demand following the freefall in global stocks, the price soared to 1.3686 on the last trading day of 2020 following a last minute trade deal between the EU and the UK, then to a peak of 1, 4241 over almost 34 months at the end of February suggests that a major low has been reached. Although it hit a 3-year high at 1.4250 on June 1, a sell-off at 1.3162 in December signals that a long-awaited correction has occurred. Cable drop to 1.3000 in March and then to 23 month low at 1.2156 last Friday would extend to 1.2000 given 1.1959. Cable rally abv 1.2412 Mar may head towards 1.2638 b4 down.

Today, while Thur's gain to nearly 2-week high at 1.2524 suggests a rise from May's 23-month low at 1.2156 could extend the marginal gain, "downside divergences" on the Hourly indicators would preclude a sharp rise from 1.2535 n lower yields later in the day. Below 1.2394, the top made n heads towards 1.2330 on Monday.