US Dollar rebound sees correction bias for GBPUSD

Intermediate
  • Monday produced a selloff across global equity markets in a “buy the rumour, sell the fact” type move, after the announcement of solid progress in the US-Sino trade talks.
  • This “risk off” move also encouraged a flight to safety move in Forex markets, with the US Dollar the main beneficiary as a safe haven.
  • For GBPUSD, although the intermediate-term outlook currently remains positive, this US Dollar rebound has seen a push below some technical, chart support levels, which shifts the immediate bias for a correction to the downside.

 

GBPUSD bias switches for a correction lower

A setback Monday from just below the 1.3286 resistance level to prod below the up trend line from mid-February and minor 1.3170 support from Friday, to switch risks lower for Tuesday.

The late February surge through 1.3218 set an intermediate-term bullish trend

For Today:

  • We see a downside bias for 1.3140; break here aims for 1.3049.
  • But above 1.3286opens risk up to 1.3350/63.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.3473 and 1.3608

  • What Changes This? Below 1.2967 shifts the outlook back to neutral; through 1.2771 is needed for a bear theme.

 

4 Hour GBP/USD Chart

GBP/USD Chart


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Current Market Analysis
Euro breaks down, GBPCAD threatens upside

US Dollar Index holds support and rebounds EURUSD seeds multiple negative signals, downside risks GBPUSD sends buy signal GBPCAD sets up more bullish AUDUSD negative and USDCAD buy signal USDTRY and USDBRL surge

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