Sat, June 15, 2024

GBP/USD Climbs 3.25%, Nears Critical Resistance at 1.2731

GBP/USD: British pound sterling coins. Bank of England (BoE)

Quick Look:

  • Surge: GBP rose 3.25% from its yearly low, nearing critical resistance.
  • Key Resistance: 1.2731 (yearly open), 1.2773-1.2781 (Feb 2019 low), 1.2857 (yearly high-day close).
  • Support Levels: 1.2575 (March low), 1.2535-1.2540 (200-day MA), 1.2423 (Dec 2022 high-day close).
  • Events: Upcoming UK CPI and retail sales are pivotal for market sentiment.

The British Pound has experienced a notable surge, rising 3.25% from its yearly low. This upward momentum, triggered by a breakout from the May opening range, is now nearing critical technical resistance levels.

Resistance stands at 1.2731, marking the yearly open and presenting a significant technical barrier. The next resistance range is between 1.2773 and 1.2781, which includes the February 2019 low and a 100% extension of the April advance. Beyond this, the level at 1.2857 represents the yearly high-day close, a crucial point for continued bullish momentum.

Support is initially found at 1.2575, the March low. The next level of support, between 1.2535 and 1.2540, is near the 200-day moving average and serves as a near-term bullish invalidation point. Further support is at 1.2423, the December 2022 high-day close, marking a vital support zone.

Post-CPI Breakout Fuels 3.25% GBP/USD Rally

A post-CPI breakout from the May opening range drove the British Pound’s 3.25% rise from its yearly low. This movement has brought the GBP/USD pair to significant technical resistance within a broader yearly downtrend.

GBP/USD has rallied more than 3.25% from its yearly low. The breakout from the May opening range signals the potential for further gains.

Resistance at 1.2731 aligns with the yearly open and presents a confluent resistance point. The zone between 1.2773 and 1.2781, defined by the February 2019 low and the 100% extension of the April advance, is a critical resistance area. The level at 1.2857, representing the yearly high-day close, is a target for the continued bullish trajectory.

Support starts at 1.2575, the March low. The range between 1.2535 and 1.2540, which aligns with the 200-day moving average, is a near-term bullish invalidation point. Further support is at 1.2423, the December 2022 high-day close, with an additional key level between 1.2337 and 1.2364.

Technical Analysis: GBP/USD Approaching Key Resistance

The GBP/USD pair is currently following an ascending channel formation. Resistance at the yearly open (1.2731) and the February 2019 low/100% extension of the April advance (1.2773/81) suggests potential topside exhaustion or a price inflexion point. A stretch towards the yearly high-day close (1.2857) is likely if the upward momentum continues. Initial support is at the March low (1.2575), with near-term bullish invalidation at the February close-low/200-day moving average (1.2535/40). Further support is found at the December 2022 high-day close (1.2423), with another key level between 1.2337 and 1.2364.

GBP/USD Bullish Outlook on Dips and Breakouts

The breakout from the monthly opening range and the post-CPI rally have set the stage for this bullish movement. Next week’s upcoming UK CPI and retail sales reports are crucial and could significantly impact market sentiment.

As we approach month-end, the outlook remains weighted to the topside, with major resistance levels in focus. There is a risk of potential exhaustion or price inflexion at these levels, requiring close monitoring of market developments.

The British Pound has rallied, encountering resistance at 1.2650 and extending to 1.2750. Should a breakout occur, there is potential for the price to move towards 1.30.

Resistance at 1.2650, Support at 1.2250 Highlighted

Resistance at 1.2650 marks an initial barrier, with further resistance at 1.2750. If a breakout continues, the pair could move towards 1.30. Support is found at the 50-day EMA, a critical level. If this support fails, the next key level is 1.2250.

The GBP/USD pair faces resistance between 1.2650 and 1.2750. The 50-day EMA provides significant support, and a breakdown below this level could lead to a move towards 1.2250.

Current market conditions favour buying on dips or breakouts, supported by the Federal Reserve’s loose monetary policy stance. This suggests a bullish outlook for the GBP/USD pair as long as support levels hold and resistance is breached.

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