Technical Analysis – GBPUSD continues its movement in its sideways channel

Nov 08,2019

Market Strategist

Following our last week’s report on GBP/USD, the pair continues to be traded its side-way channel, retracing from psychological resistance 1.3000 back to its support at 1.2800 level. The pair is currently holding on above its 18EMA, requiring further market sentiment to breakout from the channel.

In terms of indicators, MACD, forming a death cross formation, and bearish momentum. If the pair can persist its bearish momentum, the next target for the technical correction can be focused on its 50EMA near psychological level 1.2600. However, lacking sentiment from the market would suggest the pair to continue its trading inside its side-way channel.

From the fundamental point of view, recent downward pressure came from the Bank Of England (BOE) monetary policy summary. BoE’s Governor Mark Carney delivered a dovish tone on current economic conditions, with business investment being pressured by Brexit.

Furthermore, Carney also emphasized the effect of Brexit transition towards the lack of supply capacity in the economy, which is currently limiting the pick up in growth.

Furthermore, recent trade optimism, which prompted the US dollar’s appeal, also boosted investors’ risk appetite as they dive into the dollar’s market. Investors will focus on upcoming economic data from the UK, such as its job data, GDP, and also CPI, to further gauge the movement of GBP/USD.

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Technical Analysis – GBPUSD continues its movement in its sideways channel

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