The Relative Strength Index (RSI) indicator on the 4-hour chart rises toward 50, pointing to a loss of bearish momentum. On the upside, the 100-day Simple Moving Average (SMA) aligns as immediate resistance at 1.2970. In case the pair makes a daily close above this level, it could attract technical buyers. In this scenario, 1.3010 (upper limit of the descending channel) could be seen as next resistance before 1.3060 (20-day SMA).
Looking south, first support could be spotted at 1.2900-1.2890 (round level, mid-point of the descending channel) before 1.2800 (round level, static level).
After rising toward 1.3000 on Friday, GBP/USD lost its traction and closed the day marginally lower. The pair stays relatively quiet and moves sideways above 1.2950 in the European morning on Monday.
Although the upbeat market mood helped GBP/USD hold its ground in the European trading hours on Friday, rising US Treasury bond yields supported the US Dollar heading into the weekend, causing the pair to reverse its direction.
In the absence of high-impact macroeconomic data releases and fundamental drivers, GBP/USD could react to changes in the risk perception on Monday. At the time of press, US Stock index futures were rising between 0.5% and 0.7%. In case risk flows dominate the action in financial markets after Wall Street's opening bell, the USD could come under renewed selling pressure.
On Wednesday, the UK government will present the Autumn Budget. The US economic calendar will also feature key data releases in the second half of the week.
The US Bureau of Economic Analysis will publish the first estimate of the annualized Gross Domestic Product (GDP) growth for the third quarter on Wednesday and release the Personal Consumption Expenditures (PCE) Price Index figures for September on Thursday. Finally, the US Bureau of Labor Statistics will release the labor market data for October on Friday.
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