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MTrading Team • 2024-01-17

GBPUSD bears approach key supports as UK, US data loom

GBPUSD bears approach key supports as UK, US data loom

GBPUSD remains pressured at the lowest level in eight days after breaking a five-week-long trend line support the previous day. Apart from the support break, bearish MACD signals and an absence of oversold RSI also keep the Cable sellers hopeful. With this, the quote’s further downside toward the 1.2600 support confluence, comprising a 50% Fibonacci retracement of July-October downside and 50-SMA, appears imminent. However, the 200-SMA level surrounding 1.2545 appears a tough nut to crack for the Pound Sterling sellers, a break of which will make the pair vulnerable to slump toward the 1.2330-20 support zone comprising multiple levels marked since late May 2023.

Alternatively, the GBPUSD pair’s corrective bounce needs validation from the aforementioned previous support line, close to 1.2665 at the latest, to convince the short-term buyers. Following that, a 5.5-month-old horizontal resistance area near 1.2790, quickly followed by the 1.2800 threshold, will test the quote’s further upside. In a case where the Cable buyers manage to keep the reins past 1.2800, the 11-week-long support-turned-resistance near 1.2890 and the 1.2900 round figure will be the last defense of the Pound Sterling sellers.

Apart from the bearish technical signals, the comparative economic pessimism surrounding the UK and recent hawkish bias about the Federal Reserve (Fed) also keeps the GBPUSD sellers hopeful as the UK inflation and the US Retail Sales loom.

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