GBP/USD climbs to a session high of 1.2885
It is steady as she goes for the pound to start the week as cable continues its good early morning run to hit a high of 1.2885 on the session.Price is now moving closer towards testing key near-term levels in the form of the 100 and 200-hour MAs, sitting at 1.2902 and 1.2899 respectively. Light offers around the 1.2900 level will also come into play should we get there.
FX Street: GBP/USD technical charts: Failed breakout vs impending golden cross
- The failed breakout on GBP/USD’s daily chart is painting a bearish picture.
- The daily chart also shows an impending golden cross, a bullish development.
- The latter is a lagging indicator and often traps buyers on the wrong side of the market.
GBP/USD’s daily chart is reporting conflicting technical signals.
To start with, the pair fell 0.58% on Friday, invalidating a bull flag breakout – a continuation pattern – confirmed on Nov. 19. A failed breakout is widely considered a powerful bearish signal.
Even so, some technical traders may be reluctant to sell, as the 50-day and 200-day moving averages look set to produce a golden crossover in the next couple of days. A golden cross is a sign of long-term bull market, according to technical analysis theory.
In reality, however, it is a lagging indicator and often marks interim tops. Hence, the failed flag breakout takes precedence over the impending golden cross. Put simply, the probability of the pair falling to levels below 1.28 is high. Currently, GBP/USD is trading at 1.2846.
GBP/USD has been moving marginally higher as Prime Minister Boris Johnson’s Conservative Party has gained ground in the polls. Can cable extend its gains? It may struggle.
The Technical Confluences Indicator is showing that fierce resistance is waiting at 1.2887, which is the convergence of the Simple Moving Average 100-4h, the Fibonacci 38.2% one-week, the Fibonacci 61.8% one-day, the Bollinger Band 1h-Upper, and the BB one-day Middle.
If pound/dollar succeeds in breaking higher, the target is 1.3013, which is the meeting point of the Pivot Point one-day Resistance 3 and the previous monthly high.
Support awaits at 1.2821, which is the confluence of the BB 1h-Lower, the Fibonacci 23.6% one-month, and the previous daily low.
If it loses that cushion, the next target is 1.2721, where the PP one-week S2 and the 200-day SMA hits the price.
This is how it looks on the tool:
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.
This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. This means that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.
- NEWS: Rising Treasury yields are driving USD/JPY higher December 12, 2019 at 04:14PM
- NEWS: EURUSD tests support swing area. Bounces. December 12, 2019 at 04:08PM
- NEWS: Cable sags back to 1.3110. Here’s the schedule for election news December 12, 2019 at 04:01PM
- NEWS: AUDUSD tests 200 day MA. Key level for buyers and sellers. December 12, 2019 at 03:41PM
- NEWS: AUD/USD touches the 200-day moving average for the first time since April December 12, 2019 at 03:36PM
Top Posts & Pages
- UK General Election: What's Tactical Voting and What is the Extreme Result going to be like
- GBP Charts
- GBP Charts
- NEWS: FOMC decision preview – focus on the dots December 11, 2019 at 02:59PM
- Is Zcash (ZEC) a Total Failure? Crypto Influencers Disagree
- NEWS: BOJ Dep Gov Amamiya speech: "Japan's Economy and Monetary Policy" - full text December 12, 2019 at 01:31AM
- NEWS: China commerce ministry on trade talks: We are in close communication with the US December 12, 2019 at 07:13AM
- Final scramble for votes in 'most important UK election in a generation' ... THE GUARDIAN Reports
- EUR/USD Outlook Ahead of ECB, Post-FOMC Analysis
- NEWS: More UK press front pages - 'Election on knife edge' December 11, 2019 at 10:06PM