GBPUSD TRADING IDEAS

GBPUSD TRADING IDEAS

GBPUSD TRADING IDEAS

1.3770 SUPPORT KEY

After seeing another week of heavy declines, the GBPUSD pair is now heavily on the backfoot and tested another key downside level on Friday, the 1.3770 support pivot. A brief 10-pip break led to a near 80 pip rally off this key level, and we may see a further retrace higher, until the U.S dollar finds a meaningful directional bias and the UK data releases are over with next week.

The ongoing Brexit negotiations and focus on the upcoming Italian elections are likely to be POUND bearish, however the Bank of England last week stated the need for rates to be raised quicker than previosly thought. The change in stance from the BOE is more likely based up the premise of the BOE building a significant buffer of rate increases incase a market crisis or financial crisis appears, rather than underlying recovery of the UK economy itself.

OTHER KEY LEVELS

A breach of the 1.3770 levels would likely lead to a substatial weakening of the GBPUSD pair towards the 1.3650-58 region, with further major support below at 1.3300 and the pairs rising 200-day MA at 1.3250.

To the upside, the 1.3859 and 1.3930 levels offer solid forms of technical resistance, as does the key 1.4000 handle, we may see the pair move towards any of these levels, as the GBPUSD can be volatile after heavy data releases, and ofcourse pulled around by the U.S dollar index and next week CPI and PPI releases from the U.S, not to mention risk-off sentiment and volatility.

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