GBP/USD attempts rebound and recovery

<p>GBP/USD (daily chart shown below) has attempted a rebound and recovery from its key 1.6700 support level up towards its long-term highs within the past week. […]</p>

GBP/USD (daily chart shown below) has attempted a rebound and recovery from its key 1.6700 support level up towards its long-term highs within the past week.

In the process, the currency pair has risen once again back up to its 50-day moving average. This exhibits the continuing magnitude of strength that the pound has generally maintained against the US dollar for the past year, in contrast to other major currencies.

For over a month, GBP/USD has declined in a measured pullback move from its four-year high of 1.6995 that was reached in early May. This pullback has formed a month-long descending trend line that has not yet been breached to the upside.

Price action is currently in consolidation at the important juncture of this short-term trend line and the 50-day moving average.

With any significant breakout above this resistance juncture, a recovery from the current pullback should be in order. The upside target in this event would once again reside at the 1.7000 level for a potential resumption of the current uptrend.

To the downside, for any potential breakdown and extension of the pullback below the noted 1.6700 support level, which also happens to be a key 38.2% Fibonacci retracement level, a further downside support target resides around the 1.6500 level and the 200-day moving average.

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.