GBP/USD struggles to bypass monthly PP
GBP/USD struggles to bypass monthly PP
In line with expectations, the overall optimism related to progress made on tax reform and decreased probability of a government shutdown continued to push the cable downwards. Although the pair has crossed the 200-hour SMA, the further plunge was temporarily stopped by the monthly PP at located at the 1.3372 level. But since information background remains positive and the currency rate is located within junior descending channel, it is expected to continue moving to the bottom towards the 1.3340 mark.
In any case, an active surge is unlikely as northern side became protected by a combination of the weekly PP, the 55- and 200-hour SMAs. The only factor that might break the above resistance would be political news especially the one that are related to Brexit.
In line with expectations, the overall optimism related to progress made on tax reform and decreased probability of a government shutdown continued to push the cable downwards. Although the pair has crossed the 200-hour SMA, the further plunge was temporarily stopped by the monthly PP at located at the 1.3372 level. But since information background remains positive and the currency rate is located within junior descending channel, it is expected to continue moving to the bottom towards the 1.3340 mark.
In any case, an active surge is unlikely as northern side became protected by a combination of the weekly PP, the 55- and 200-hour SMAs. The only factor that might break the above resistance would be political news especially the one that are related to Brexit.
During previous trading session the pair initially slipped to support line located at the 1.3338 mark but then suddenly resumed the surge and ended the day at the 50% Fibonacci retracement level. The drop was based on reports about the action made by Congress aimed to avoid government shutdown, while the surge reflected progress made on the Irish border deal.
As Theresa May heads to Brussels to resume the talks, the Pound is expected to continue appreciating against the Dollar, trying to reach the 1.3550 mark. However, this upward movement might be quickly stopped in case of disappointing news coming from Belgium’s capital. If this negative scenario materializes a combination of the 55-, 100- and 200-hour SMAs together with the weekly PP are unlikely to keep the bearish pressure.