GBP/USD Price Analysis: Cable Indecisive Ahead Of Earnings Season


GBP/USD bulls have taken control of the pair as a result of a reduced demand for the US Dollar. This strength against the greenback has been observed across all G10 currencies of recent. The daily chart below shows this trend with higher highs and higher lows as indicated (yellow). This medium-term outlook suggests a bullish inclination with price concurrently respecting the support turned resistance trend line mentioned above. Although we have seen price dip below this trendline, the near term uptrend remains.

This bullish momentum is further reinforced by the RSI remaining above the 50 level but still out of overbought territory. Key Fibonacci levels are taken from the November 2007 high to the March 2020 low.


GBP/USD Daily chart:

(Click on image to enlarge)

GBP/USD daily chart

Chart prepared by Warren Venketas, IG

Bullish traders may look for more upside with initial resistance coming from the diagonal trend line (yellow), accompanied by stronger than expected UK economic data which is scheduled throughout this week (see DailyFX economic calendar below).

US economic data is also featured prominently this week with Inflation, Retail Sales and Consumer Sentiment data to be relayed. These economic announcements may influence the GBP/USD pair significantly so be sure to keep these in mind. This said, US earnings season kicks off this week which can increase market volatility depending on price deviation from analyst forecasts and market sentiment.


(Click on image to enlarge)

DailyFX econolmic calendar

DailyFX Economic Calendar

The bearish perspective can be seen on both daily and 4-Hour charts. The daily RSI (chart above) is currently sitting at 62 - daily level of resistance (black) as highlighted on several occasions previously (black circles). In addition, the 4-Hour RSI (chart below) can be seen declining toward the 50 mark (black), whilst price action over the same period can be seen ascending (yellow). This is known as divergence and more specifically ‘bearish divergence’ and is suggestive of a trend reversal – in this case, from bullish to bearish.

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