The cable has entered third consolidation session this week after plunging to 1.3930 yesterday. Today the pair rallied to failed to secure gains above 1.4000 level, on seven pips higher and retreated to 1.3971 low, only 36 pips as price action, but expectations for more volatility on GBP/USD ahead of UK and U.S. data.
Technically, the pair is flirting around 5-EMA and 10-EMA ( 5 above 10), with daily RSI reading at still above 50 level, supports upward action. As for supports to take into consideration, first 20-EMA at 1.3960, second 1.3900-10, 23.6 Fib level.
As for fundamentals, a busy day starting with UK Average Earnings which will be released shortly, expectations are placed at 2.5%, same print for January. The major effect that impact the pound is Inflation Hearing Report where BoE meets with MPC members, setting future economic outlook and 2018 potential Interest Rates. After that, we move with U.S. threshold in the afternoon with the FOMC statement proving more depth into economic expectations and market-talk-about global and local inflation.
- GBP/USD Technical Summary:
- Closing price: 1.3992
- Target price: 1.4225
- Resistance: 1.4036, 1.4115-60, 14200+
- Support: 1.3931, 13904*
- Trend: Sdwys/Up daily
- Trend Reversal price: 1.3904
- Comment: The market is suggesting a secondary upswing back into previous peaking levels and chance for a run to 1.4225-1.4280. A punch over Friday's minor reversal high could spark rallies to 14200+. Yesterday's back off still cautions for dips to check for support at 1.3904*. A close under 13904* alerts for a short term reversal back to lower levels.