GBP/USD Technical Outlook: Sterling Rebound Eyes Initial Resistance

The British Pound has rallied scarcely 2% off a May lows with a allege now coming initial topside insurgency targets. The concentration stays on a widen into yearly open insurgency with a crack there indispensable to advise a some-more poignant low is in place. Here are a GBP/USD levels that matter streamer into a tighten of a week.

GBP/USD Daily Price Chart

GBP/USD Price Chart - Daily Timeframe

Technical Outlook: In this week’s British Pound Technical Perspective, we highlighted a constructional support operation in GBP/USD while observant that, “IF Sterling is going to rebound near-term, this would be a good spot.” The annulment off slope support has collected gait mid-week with a span contrast slope insurgency currently in New York.

Key insurgency stands only aloft during 1.3464 1.3495-1.3504 – both areas of seductiveness for probable near-term depletion / short-entries. Key support stays during 1.3182-1.3225 where a Aug high-close and a 50% retracement intersect on a lower median-line parallel. A mangle next this turn would expected see accelerated waste with such a unfolding targeting support objectives during 1.3036 corroborated by a 1.29-handle.

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GBP/USD 240min Price Chart

GBP/USD Price Chart - 240min

Notes: A closer demeanour during Sterling cost movement sees what could be a bear dwindle in a works off a May lows with initial insurgency targets eyed during 1.3450 corroborated by 1.3495-1.3504. That said, given a technical considerations done progressing in a week on a US Dollar, we’ll honour a daily tighten above this threshold with such a unfolding targeting a 2017 high tighten during 1.3589 corroborated by some-more poignant insurgency during 1.3651/75.

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Bottom line: IF a Pound has put in a low, demeanour for support to reason during a weekly open during 1.3345 with a bullish cancellation turn during 1.3302– a mangle next this turn would change a concentration behind toward connection support during 1.3182. From trade standpoint, a concentration is still aloft though we’re looking for a greeting on a widen into near-term insurgency for serve guidance.

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GBP/USD IG Client Positioning

GBP/USD Client Sentiment

  • A outline of IG Client Sentiment shows traders are net-long GBP/USD- a ratio stands during -2.28 (69.5% of traders are long) –bearishreading
  • Retail traders have remained net-long given Apr 20th; cost has changed 5.8% reduce given then
  • Long positions are 8.0% reduce than yesterday and 1.4% reduce from final week
  • Short positions are 4.3% aloft than yesterday and 1.9% reduce from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests GBPUSD prices might continue to fall. However, positioning is reduction net-long than yesterday but some-more net-long from final week andthe multiple of stream positioning and new changes gives us a serve churned GBPUSD trade bias from a view standpoint.

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Relevant GBP/USD Data Releases

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GBP/USD Economic Calendar

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– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or hit him during mboutros@dailyfx.com

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