Cable Technical Analysis
112 April – GBP/USD
GBP/USD traded higher during the European morning Tuesday after it hit support near the 1.4230 (S1) level. The pair has been trading in a wide range between the 1.4050 (S3) area and the psychological zone of 1.4500 (R3) since the 2nd for March. Therefore, I would consider the short-term outlook to be neutral. For now though, I see signs that the current surge may continue for a while. If the bulls are strong enough to overcome the 1.4320 (R1) resistance zone, I would expect them to pull the trigger for the 1.4410 (R2) hurdle. Our short-term momentum indicators detect strong upside speed and support the case that Cable could continue higher for a while. The RSI moved up and just poked its nose above its 70 line, while the MACD stands above both its zero and trigger lines, pointing north. Zooming out to the daily chart, I see that the rate is still trading below the 80-day exponential moving average, which provided reliable resistance to the price action on the 17th and 31st of March. This keeps the prevailing longer-term downtrend intact. Also, that moving average currently coincides with the 1.4410 (R2) zone and as a result it is possible to reject further advances once again if the rate manages to test that territory. In my view, a clear close above 1.4500 (R3) is needed to signal a possible medium-term trend reversal.
• Support: 1.4230 (S1), 1.4170 (S2), 1.4050 (S3)
• Resistance: 1.4320 (R1), 1.4410 (R2), 1.4500 (R3)
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