GBP/USD Trims Weekly Gains After Finding Strong Trendline Resistance

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The GBP/USD currency pair on Friday pulled back to trim this week’s gains after finding strong trendline resistance. The currency pair continues to trade within a descending channel formation in the 60-min chart.

The pair also remains pinned a few levels above the 100-hour moving average following Friday’s pullback. It has since returned to the normal trading zone of the 14-hour RSI, after advancing to overbought conditions earlier in the week.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair is trading at the back of a relatively busy period in both the UK and the US markets. On Thursday, the Bank of England voted to keep the base interest rate unchanged at 0.1%. On the other hand, the preliminary Markit manufacturing PMI for September missed the expectation of 59 with 56.3, while the Services PMI came short of 55 with 54.6. On Friday, the GfK Consumer Confidence for September missed the ex[pectation of -7 with -13.

In the US, traders will be looking forward to Friday’s new homes data for August, ahead of the Fed chair Powell’s speech. On Thursday, the initial jobless claims for the previous week returned a tally of 351k, substantially higher than the expected claim count of 320k. The continuing claims also missed the expectation of 2.65 million with 2.845 million. On the other hand, the preliminary US Markit Manufacturing PMI, the Services PMI, and the PMI composite for September all missed expectations.

GBP/USD Technical Analysis (the 60-min Chart)

Technically, the GBP/USD currency pair seems to be trading within a gently descending channel formation in the 60-min chart. This indicates a slight short-term bearish bias in the market sentiment.

Therefore, the bears will be looking to extend the current downward movement towards 1.3658 or lower to 1.3610. On the other hand, the bulls will target potential channel breakout profits at 1.3746 or higher at 1.3792.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair appears to be trading within a descending channel formation. The pair recently bounced back to move towards the trendline resistance.

Therefore, the bulls will be looking to extend the current rebound towards 1.3837 or higher to 1.3973. On the other hand, the bears will be targeting long-term profits at around 1.3575 or lower at 1.3441.

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