- The British pound is down for the fourth time this week, it appears to close below 1.3300.
- A subdued market sentiment hurts the outlook for the British pound as investors seek safe haven assets.
- GBP / USD: On the 4-hour chart, the 50 SMA has acted as resistance and the rallies towards the moving average have faded.
The GBP it trimmed Thursday’s earnings and something else is down 0.50%, trading at 1.3232 during the American session at the time of writing. Risk aversion led investors to abandon anything with the word “risk” attached to it, benefiting safe-haven assets. In the Forex market, USD, JPY and CHF benefit the most from those mentioned above and are the strongest currencies as we approach the close of Wall Street.
In the past three hours, the pound rebounded away from Friday’s daily low around 1.3215, towards 1.3245, in a steady move that could have been driven by profit-taking from the USD. Furthermore, USD bulls failed to break 1.3200 following November’s dismal non-farm payroll report, which had it been in line with estimates or better, GBP / USD would in fact trade at yearly lows.
Next week’s UK economic agenda will feature speeches by BoE members, retail sales, manufacturing output and GDP.
GBP / USD Price Forecast: Technical Outlook
On the 4-hour chart, GBP / USD is biased to the downside, as shown by the 4-hour Simple Moving Averages (SMA), which is sloping downward and above price. In addition, the 50 SMA has undergone three tests, and in each of them, the British pound has failed to overcome it, leaving that level as a strong resistance level.
In the result of extending the bearish move, the first support would be 1.3200. A break below the latter would expose the November 30 low at 1.3194, followed by the 1.3100 figure.
Contrary to the upside, the first resistance would be 1.3300. A break above that level would expose the 50 SMA at 1.3318, followed by the 100 SMA at 1.3374.
Additional technical levels