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SYMBOL
LAST
BID
ASK
HIGH
LOW
NET CHG.
%CHG.
SPREAD
SPX
S&P 500 Index
6870.39
6870.39
6870.39
6895.79
6858.28
+13.27
+ 0.19%
--
DJI
Dow Jones Industrial Average
47954.98
47954.98
47954.98
48133.54
47871.51
+104.05
+ 0.22%
--
IXIC
NASDAQ Composite Index
23578.12
23578.12
23578.12
23680.03
23506.00
+72.99
+ 0.31%
--
USDX
US Dollar Index
98.740
98.820
98.740
98.960
98.740
-0.210
-0.21%
--
EURUSD
Euro / US Dollar
1.16704
1.16712
1.16704
1.16705
1.16341
+0.00278
+ 0.24%
--
GBPUSD
Pound Sterling / US Dollar
1.33453
1.33463
1.33453
1.33455
1.33151
+0.00141
+ 0.11%
--
XAUUSD
Gold / US Dollar
4217.38
4217.79
4217.38
4218.45
4190.61
+19.47
+ 0.46%
--
WTI
Light Sweet Crude Oil
60.011
60.048
60.011
60.063
59.752
+0.202
+ 0.34%
--
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Bulls Need to Break 1.2350 for More Meaningful Display of Technical Strength
Summary:
On Thursday, the British pound rallied above 1.2200 against the US dollar. The asset benefited from a pause in the US dollar's rise. However, bulls need to break 1.2350 to demonstrate more meaningful technical strength; otherwise, the outlook may continue to turn bearish.
CLOSED
1.21920
Entry Price
1.19390
TP
1.23900
SL
1.33453 +0.00141 +0.11%
110.3
Pips
Profit
1.19390
TP
1.20817
Exit Price
1.21920
Entry Price
1.23900
SL
Fundamentals
After testing a critical support level near 1.2110, the relative strength index (RSI) is around 20, indicating an extremely oversold market. Still, there is no divergence suggesting that the GBPUSD will continue to move lower following the retracement (within the 1.2270 range), as seen in the downtrend since mid-July.
If the RSI breaks its downward trendline, more rebound adjustments are expected. It is common to move upward to test the 200-day SMA after breaking below.
However, the 1.2110 support level is not the strongest, indicating that the GBPUSD may continue its downward trend to the 1.1900-1.1800 range following possible adjustments. Meanwhile, the 21, 55, and 100-day SMAs are all declining, and the 200-day SMA is very close to a potential bearish trend and sentiment. With the GBPUSD closing below 1.2300 last week, a medium-term bearish trend has been confirmed. The weekly RSI is currently below 40, and if it closes below this threshold this week, it will only exacerbate the bearish scenario, with the medium-term potential for a decline to the 1.1900-1.1800 range. To reverse the bearish trend, a close above 1.2350 is needed in the short term.
Technical Analysis
Despite the current bearish momentum in GBPUSD, a rebound is expected to continue from the first support level at 1.2112, advancing toward the first resistance level at 1.2277. The first support level, acting as a confluence support zone, is a critical area where prices may find support and initiate an upward movement. Additionally, the second support level at 1.2079 is associated with the 127.20% Fibonacci extension, representing another important support area, enhancing the likelihood of a price move upwards from these levels.
On the resistance side, the first resistance level is at 1.2183, considered a retracement resistance level that may temporarily limit the upward movement of prices. Furthermore, the second resistance level at 1.2279 is also a retracement resistance level, marking another significant area that could potentially act as an obstacle to further price increases.
Overall, the short-term technical signals for GBPUSD are bullish, suggesting a potential extension of the rally above 1.2200. However, bulls need to break the 1.2350 level to demonstrate more meaningful technical strength. Otherwise, a continuation of the bearish trend may follow. In terms of trading strategy, it is recommended to go short at highs.
Trading Recommendations
Trading Direction: Short
Entry Price: 1.2260
Target Price: 1.1939
Stop Loss: 1.2390
Valid until: 2023-10-12 23:55:00
Support: 1.2180, 1.2086, 1.2010
Resistance: 1.2193, 1.2279, 1.2371
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