HomeContributorsTechnical AnalysisGBP/USD Outlook: Bullish Engulfing Generates Initial Reversal Signal

GBP/USD Outlook: Bullish Engulfing Generates Initial Reversal Signal

Cable keeps positive tone in European trading on Thursday, following almost 1% advance on Wednesday (the biggest one-day gains since 9 July 2021).

Repeated failures to clearly breakthrough 1.30 support resulted in strong bounce that generates of initial signal of a double-bottom formation on daily chart, although stronger advance is still needed to give more evidence of a pattern formation.

Wednesday’s bullish engulfing and today’s extension above 50% retracement of 1.3298/1.2972 bear-leg marks initial reversal signal, which looks for confirmation on close above 1.3135 (50% retracement) to expose next key levels at 1.3174 and 1.3221 (Fibo 61.8%/Fibo 76.4% respectively).

Daily studies are improving, but still lacking clearer direction signal as 14-d momentum continues to head north and approach the centreline which separates negative from positive territory and MA’s are mixed.

Near-term bias is expected to remain with bulls if the pair registers repeated close above 1.3097 (Fibo 38.2% of 3298/1.2972), while failure here and return below 10DMA (1.3075) would revive bears.

Res: 1.3147; 1.3174; 1.3221; 1.3273.
Sup: 1.3097; 1.3075; 1.3049; 1.3000.

Windsor Brokers Ltd
Windsor Brokers Ltdhttp://www.windsorbrokers.com/
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