GBPUSD – Current Resistance Key for Cable

Cable has entered into an interesting trading zone on Friday which could give a strong indication of what we can expect from the pair in the coming weeks.

The area between 1.4350 and 1.44 and been a key zone of support and resistance throughout this year and could once again prove to be the case.

GBPUSD 4hr

On this occasion, 1.4350 is also the 61.8% retracement of the move from 4 February highs to 29 February lows, while the 55-day simple moving average falls around 1.4370.

GBPUSD Daily

With all this in mind, if the pair is still bearish, this could be seen as a logical place for it to rotate back to the downside. Alternatively, a break above here could signal a bottoming out in the pair or at least a broader correction.

At the moment, it’s too early to say which this is but I’ll be paying close attention for reversal signals. This will preferably come in the form of a reversal setup in price action – evening star, bearish engulfing, even a shooting star – and possibly be supported by bearish divergence with the MACD or stochastic.

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.