GBP/USD: Opportunity for Cable Rebound Near Current Levels – Keep an Eye on Data
2024.11.22 05:39
The has made strong losses against the US dollar in the third quarter so far, having been overheated in September. Donald Trump’s election has generated some negativity due to the likely introduction of tariffs and general deterioration of relations between the UK and USA.
However, with the BoE now much less likely to cut rates next month and with only two cuts expected next year, it’s questionable whether there’s a strong fundamental reason for further strong losses by cable.
The price is still in the area of the 50% monthly Fibonacci retracement which seems to be quite a strong support.
An attempt to move below $1.26 was rejected with some strength on 15 November but $1.27 seems to be a significant local resistance. For a major forex pair, cable’s movements have been quite dramatic in the last few months. There’s still a strong oversold signal from the slow stochastic after this oscillator’s crossover on 18 November.
$1.23 seems to be the next critical support on the weekly chart but it’d be unlikely to see the price move that far before the end of the year. If the next interaction with $1.27 leads to a breakout above, one might expect a pause before the next possible movement lower, but a reversal of the downtrend also looks possible.
In the short term, selling looks more risky than buying unless there are significant surprises from upcoming data.
