Mixed Signals in Different GBP/USD Charts
GBP/USD retreated lower last week after the BOE and the FED, but bounced back this week and now both buyers and sellers look uncertain
The GBP was among the most bearish currencies in September as it collapsed on surging UK gilt yields, although after intervention by the Bank of England markets stabilized and the GBP turned bullish. The weakness in the USD since October as the FED softened the rhetoric also helped GBP/USD further, which gained more than 20 cents until December.
Although a resistance zone was formed around 1.2450s, which rejected the price in January again. Last week we saw a reversal lower though after the FED and BOE meetings, which delivered a 25 bps and a 50 bps rate hikes respectively. The great employment and services reports from the US on Friday turned the USD bullish and this pair fell to 1.1950s, where it met the 200 SMA (purple) on the daily chart above.
This moving average held as support and the stochastic indicator became oversold. So, this week we are seeing a bounce off the 200 SMA after the price formed a doji candlestick on Monday and GBP/USD has rallied around 250 pips higher since then.
GBP/USD H4 Chart – Is the 200 SMA Turning Into Resistance?
The price is overbought on the H4 chart
Although, the H4 chart might be pointing to a bearish reversal, as the climb yesterday stopped at the 50% midpoint Fibonacci retracement level (move down from the high last week) at 1.2180-90. Today we are seeing a reversal, after buyers found decent resistance at the 200 SMA (purple) on the H4 chart.
So, we are seeing some mixed signals in this pair. Although the bearish case on the H4 chart seems stronger than the bullish setup on the daily chart. Besides that, we have seen some retreat in the USD this week, which should be enough before the next bullish move, which is bearish for this pair. So, we are looking to open a long term sell signal in this pair.
GBP/USD Live Chart
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