GBPUSD, H1
There are several factors that have affected the GBPUSD and made it weak, including expansionary policy by the Bank of England, sharp re-pricing of potential interest rate moves and strained relations with the European Union due to the Northern Ireland Protocol and fishing rights.
UK economic growth data released in the London session led to a limited reaction in the markets. Positive news is that September’s GDP expanded by 0.6% m/m though, while preliminary figures for the third quarter showed a 6.6% y/y growth rate, less than expected.
On the other hand, the US Dollar continues to benefit from US inflation data. These indicators showed that the consumer price index is at its highest levels in 30 years and reinforced expectations that the Federal Reserve will tighten monetary policy sooner than most other major central banks.
Technical Analysis
On an hourly time frame, the GBPUSD has been in a bearish channel since October 29 which is confirmed by the presence of the 200 SMA (red) above the 50 SMA (blue). The highest resistance was reached at 1.38314. The lowest support reached by the currency pair is the current price at 1.33871.
MACD signal line and histogram are below the 0 line and are continuing to rise.
The Bollinger Bands indicator here shows that the upper band and the lower band are approaching each other as the upper band of the volatility channel is located at 1.34220 and the lower band of the volatility channel is located at 1.33835 and this indicates a period of low volatility. Standard Deviation (20) at 0.000938 is oversold and Average True Range (14) is at 0.00208
In the following image, we find the pivot point, resistances and supports, where the main pivot point is located at 1.34585. The first, second and third resistances, respectively, are located at 1.35135, 1.36210 and 1.36754, while the first, second and third support are at 1.33485, 1.32885 and 1.31785, respectively. The RSI is at 33.91 and is pointing down, indicating the continuation of the decline.
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Islam Salman
Market Analyst – Middle East
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