GBP/USD retreats sharply from resistance

<p>GBP/USD (daily chart shown below) has retreated sharply within the past two days from major resistance around the key 1.5500 level. That 1.5500-area resistance is […]</p>

GBP/USD (daily chart shown below) has retreated sharply within the past two days from major resistance around the key 1.5500 level. That 1.5500-area resistance is also around where the pivotal 200-day moving average is currently situated.

The current retreat occurs after two weeks of sharp advances that boosted the currency pair from its latest multi-year low of 1.4565 in mid-April all the way up to a two-month high near the noted 1.5500 resistance on Wednesday. That high fell just short of February’s high, which was slightly above 1.5500.

Prior to the sharp rebound and partial recovery from multi-year lows in the latter half of April, GBP/USD had been entrenched in a long and sustained bearish trend from its high of 1.7190 all the way back in July of last year.

2015-05-01-GBPUSD daily chart


Currently, having retreated from both 1.5500 resistance and the key 200-day moving average, the currency pair has reached back down to the 1.5250 support/resistance level.

Any further retreat that breaks down significantly below the 1.5250 level could reinstate the overall bearish trend and pressure GBP/USD back down once again towards its 1.5000 psychological support level, followed by the 1.4800 downside target.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (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.