GBP/USD Approaching That Buying Level Again
Skerdian Meta • 1 min read
The GBP has enjoyed some happy times this week. In the beginning, it was the Brexit deal which got things rolling for GBP/USD. Then, the employment report came out pretty impressive yesterday morning and in the evening it was the Fed’s turn to give this pair the last boost.
But in the last few hours, we have seen the USD gain some momentum and reverse some of yesterday’s losses. The US Dollar has gained against most majors during this time but I can’t see any fundamental reason behind it.
I suppose this is just a normal retrace lower. As we all know by now, all trends unfold in waves. GBP/USD has moved up too fast this week, so it’s about time that a retrace took place.
The 50 SMA is teaming up with the support level
Right now, this forex pair is at an important level. The 1.4070-80 has been providing resistance on the way up in the last few days. Now, it seems like it is turning into support. It held price in the first attempt to push lower which means it is working.
There is another indicator at that area as well. That’s the 50 SMA (yellow) as you can see from the chart above. This moving average is adding extra strength to that level. Besides, the stochastic indicator is oversold on the H1 chart, which means that the retrace down is over. We just opened a buy forex signal here and it is looking good at the moment since we are 10 pips in profit already.