Wednesday, October 3, 2018

GBP/USD - 04 October 2018


Fundamental Highlights

The Pound pushes lower amid pressure from the rallying U.S Dollar. Following yesterday's ADP job report, the greenback pushed higher across the board as investors believed that the economic strength represented in this key figure will help the Federal Reserve maintain their stance in hiking rates gradually. The Pound also faced internal weakness as the Services PMI figure printed lower than expected, representing the third PMI disappointment this month after the Manufacturing PMI and Construction PMI printed lower than expected during the course of this week. In regards to Brexit, no significant development occurred within the negotiations between the EU and the UK.

Technical Analysis

The Pound continues its weekly drop as the currency falls towards the 1.29290 support level. As presented by the chart below, the 50-period moving average (yellow) is approaching the 200-period moving average (purple) and a cross below the 200-period moving average will fuel bears into shorting the pair even further. A break below the 1.29030 level will confirm that the bears have taken control once again paving the way for a drop towards 1.28103.

Support: 1.29030 1.28103
Resistance: 1.30387 1.31513

Chart (H4)