Technical Analysis: GBPUSD teases head-and-shoulder confirmation on H1

Technical Analysis: GBPUSD teases head-and-shoulder confirmation on H1

With the recent risk-off mood favoring the US dollar’s strength, GBPUSD breaks the support line of a short-term head-and-shoulders bearish chart pattern on the hourly (H1) play. However, a sustained close below the neckline, currently around 1.3645 will be needed to confirm the south-run targeting the previous week’s low near 1.3520. However, the 1.3600 round-figure can probe the bears and so do the monthly employment data from the UK for December.

On the contrary, upbeat UK jobs report and the pair’s failures to stay below 1.3645 will have to cross 200-bar SMA, at 1.3652 now, to attack the weekly resistance line near 1.3665. It’s worth mentioning that the pair’s sustained trading above 1.3665 enables it to challenge the monthly top surrounding 1.3745 wherein the 1.3700 acts as an intermediate halt. Overall, the risk aversion wave takes clues from the delay in the US fiscal stimulus and Sino-American tension. As a result, further weakening of the quote can be expected despite recently positive catalysts from the UK.

Trade Forex with MTrading

Join us on FB and Twitter to stay updated on the latest market events.