Cable Poised for Bearish Reversal Amid Britain’s Consumer Confidence News
The Great Britain Pound (GBP) extended upside movement against the US Dollar (USD) on Friday, increasing the price of GBPUSD to more than 1.4350 following the release of some key economic news. The technical bias remains bullish because of a Higher High in the ongoing rally on four-hour timeframe. The pair may however be on the verge of a bearish reversal as it approaches key resistance levels.
Technical Analysis
As of this writing, the pair is being traded around 1.4393. A hurdle may be noted near 1.4400-4410, the confluence of 38.2% fib level as well as psychological number ahead of 1.4512, the 50% fib level as demonstrated in our four-hour chart.
On the downside, the pair is likely to find a support around 1.4283, the 23.6% fib level ahead of 1.4230, the swing low of the most recent downside move on four-hour timeframe and then 1.4172, the low of January 21st. A break and four-hour closing below the 1.4172 support area could incite renewed selling pressure, validating a move towards the 1.4000 zone.
UK Consumer Confidence
UK CONSUMER confidence rose in January, shrugging off the global market volatility that overshadowed the start of the year. Market research firm GfK found that its consumer confidence index increased by two points to +4 in January, while a comparable index by YouGov and the Centre for Economics and Business Research (CEBR) rose by 0.1 points to 113. GfK also said that its major purchase index – an indicator of whether people think it is the right time to make major purchases – went up by nine points to +16.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term if we get a valid bearish reversal candle on four-hour or daily timeframe.