POUND STERLING PRICE OUTLOOK: GBP/USD ECLIPSES 200-DAY EXPONENTIAL MOVING AVERAGE, CABLE RALLIES TOWARD TREND RESISTANCE
- Spot GBP/USD just exploded over 100-pips, or nearly 1%, from intraday lows
- GBP/USD price action now trades above its 200-day exponential moving average
- The Pound Sterling could continue its advance but broader US Dollar strength is a threat
The Pound-Dollar is on pace to be the best performing major currency pair on Tuesday due to the 100-pip advance off intraday lows just notched by GBP/USD price action. After building a base around its 50-day exponential moving average near the 1.2450-mark last week, the cable has since catapulted higher to trade back above its 200-day exponential moving average.
Change in
Longs
Shorts
OI
Daily
-6%
-2%
-4%
Weekly
-21%
32%
0%
GBP/USD PRICE CHART: DAILY TIME FRAME (30 NOV 2019 TO 07 JUL 2020)
The latest stretch of strength exhibited by spot GBP/USD appears to have catalyzed a breakout from the bull flag chart pattern developed last month. Also, a recent bullish MACD crossover highlights positive divergence as upward momentum accelerates.
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These constructive technical developments suggest that GBP/USD price action could continue climbing higher with technical resistance posed by the 200-EMA now in the rearview mirror. That said, bearish trend resistance extended through the series of lower highs recorded on 12 December 2019, 09 March 2020, and 10 June 2020 threatens to send the Pound-Dollar snapping back lower.
— Written by Rich Dvorak, Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight
