GBP : Contracted Below Resistance
(Sun, 19 July 2020). GBP/USD in consolidation within multi-week bullish channel. Constructive while above 1.2279 – Key resistance 1.2754.
The British Pound snapped a two-week winning streak with sterling poised to close 0.51% lower against the US Dollar ahead of the New York close on Friday. Price remains in consolidation just below a critical resistance barrier and we’re looking for a breakout in the days ahead of guidance with the broader rally vulnerable.
The focus remains on this price consolidation with critical resistance steady at 1.2717/54- a region defined by the 61.8% retracement of the yearly range and the objective 2019 yearly open. A breach / close above is needed to mark resumption towards the yearly high-week close at 1.3078. Initial support rests with the May trendline, (currently ~1.2350s) backed by 1.2279 and the May low-week close at 1.2166- we’ll reserve this as our bullish invalidation level with a close below needed shift the broader focus lower again towards the post-Brexit low / 61.8% retracement at 1.1948/50.
Bottom Line:Sterling continues to range within a multi-week ascending channel – just below key resistance. From at trading standpoint, we’re looking for a breakout of the 1.2279-1.2754 range for guidance with the broader March rally vulnerable while below. Watch for downside exhaustion ahead of channel support IF price is heading higher with a breach above the June high needed to keep the long-bias viable.
GFS ASIA TEAM
- just now