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.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam