Two trades to watch: GBP/USD eyes 1.33, Adidas extends gains

Fiona Cincotta December 15, 2020 8:44 AM

GBP/USD comes under pressure as UK unemployment rises & claimant count surges. Adidas rides higher after potential Reebok sale announcement.

GBP/USD: Struggling After Weak Jobs Data

• UK unemployment Oct 4.9% vs 4.8% Sept
• Claimant count surges +64.3k
• US Dollar firms amid surging covid number & tighter restrictions
• Brexit headlines will be watched closely

GBP/USD

is wobbling in early trade. It remains above the ascending trendline that dates back to early November, which offers support at 1.3317. However, the pair eased back from a strong push higher to 1.3450 in the previous session warranting caution for the bulls.

$1.33 horizontal support and $1.3250 (200 SMA 4H chart) have offered strong support since late November attracting dip buyers and could continue to do so. A break-through support at 1.32 could open the door to a deeper sell off to 1.3165/7 and 1.31.

On the flip side a move above 1.3360 (50 & 100 4H chart) could confirm the bullish trend ahead of resistance at 1.34 round number and 1.3450 yesterday’s swing high and 1.35.

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Adidas' Bullish Run Continues

• Adidas earmarks underperforming Reebok for potential sale
• Acquired in 2005 for $3.8 billion
• Final decision due March ’21 with official strategy presentation
• Share price rallied on announcement yesterday

Adidas has rallied hard from its mid-March low rising over 72%. It now trades flat on the year. It trades above its ascending trend line dating back to May and above its 50, 100 & 200 sma on the daily chart. All bullish signals suggesting there could be more upside.

Immediate resistance can be seen at 290.00, December high. A break-through here could see 300.00 round number and 306.00 draw into focus.

On the downside, support from 50 sma can be seen at 276.00 prior to 270.00 where ascending trend line & 100 sma converge. A break-through here could negate the current uptrend and open the door to 250.00 prior to 245.00.

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