As apparent from the pair’s movement yesterday, the Pound tried to breach the 1.40 area for several hours; however, the combined resistance of the monthly PP, a two-week trend-line and the weekly S1 limited any movement above this psychological level. Thus, it is likely that this sessions does not bring any significant changes to the overall price level.
In case the 1.40 mark is breached, the 1.41 area should be the ultimate high for today, while the weekly S2 and the 50.0% Fibo retracement line could limit losses below the 1.3824.
GBP/USD was trading in a calm manner slightly below the monthly PP and the weekly S1 on Wednesday morning. However, the bearish pressure from the 55-hours SMA resulted in a brief southward movement down to the 1.3850 mark.
It is likely that this moving average continues to guide the Sterling within the following trading hours until fundamentals from the Bank of England scheduled for 1200GMT introduce volatility in the market. The daily high should be the 1.4050 area, while other resistance levels along the way are also expected to hinder strong hourly surges.
From the downside, the pair is supported by the weekly S2 and the 50.0% Fibo retracement at 1.3829. In case of strong downside risks, the Pound could try to test the 1.37 level, reinforced by the weekly S2 and the monthly S1.
The first part of Thursday’s trading session was spent with no changes to the overall price level for GBP/USD, as traders were cautious prior to the BOE policy statement scheduled for 1200GMT. Even though the bank kept the rates on hold, Carney’s comments about sooner hike strengthened the British Sterling above its two-day resistance of 1.40.
This relatively high position was not maintained for long, as the 200-hour SMA near 1.4075 forced bulls to abandon their positions as a result of which the Pound fell slightly below the 38.20% Fibo and the 100-hour SMA.
However, it did remain above the 55-hour SMA which could allow bulls to make another advancement, especially if the UK reports solid manufacturing production data at 0930GMT. A possible trading range for today could be 1.4060/1.3830.
Friday’s morning session was spent relatively calm for GBP/USD, as it was restricted from both sides by the 55– and 100-hour SMAs.
The bearish sentiment, reinforced by sluggish UK fundamentals, eventually took over the market, thus resulting in a 153-pip plunge in a couple of hours. This fall halted near the Febrary low of 1.38.
The pair’s subsequent movement was tended north towards a resistance cluster formed by the 55– and 100-hour SMAs and the weekly PP circa 1.39. This trading session should be quiet in terms of fundamentals; thus, the Sterling might lack the necessary bullish momentum to move past its nearest resistance. A successful breakout should be stopped near the monthly PP at 1.40.
Meanwhile, a potential southern barrier could be the weekly and monthly S1s at 1.3675.