The Great Britain Pound (GBP) extended upside movement against the US Dollar (USD) On Monday, increasing the price of GBPUSD to more than 1.5200 following the release of US Nonfarm Payrolls figure that missed the expectations by a long shot. The technical bias has turned bearish because of a Lower Low and Lower High in the recent wave.
The GBP/USD pair posted a shallow advance on Friday, extending up to 1.5236, the 23.6% retracement of its latest decline measured between 1.5657, September 18th high and the low of the same month at 1.5106, but was unable to sustain its gains beyond the 1.5200 level, leaving the dominant bearish trend in place.
Technically, the daily chart shows that the pair remains well below a bearish 20 SMA now hovering a few pips above the 38.2% retracement of the same rally in the 1.5330 price zone, whilst the Momentum indicator continues heading lower well below the 100 level and the RSI indicator has barely bounced from oversold levels.
In shorter term, the 4 hours chart shows that the price is above a flat 20 SMA for the first time in two weeks, whilst the technical indicators lack directional strength in neutral territory.
The pair needs to extend beyond the mentioned Fibonacci resistance to be able to extend its upward corrective movement, up to the 1.5300/40 price zone, yet a decline below 1.5125 will open doors for a break lower towards fresh multi-month lows.
Considering the overall technical outlook, buying the pair around current levels could be a good strategy in short to medium term. The trade should however be stopped out on a daily closing below the 1.5106 support area.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.