Youtrading UK
Português Español русский
Register Login
  • Markets
  • Charts
  • Economic Calendar
  • World
  • Economy
  • Insights
  • About Us
No Result
View All Result
Youtrading UK
  • Markets
  • Charts
  • Economic Calendar
  • World
  • Economy
  • Insights
  • About Us
No Result
View All Result
Youtrading UK
No Result
View All Result

GBPUSD Technical Analysis – Breakout in jeopardy

by Nathan Batchelor
7 January 2021
in Forex, Insights, Markets
0
GBPUSD Technical Analysis – Breakout in jeopardy

Photo by Joshua Hoehne.

290
SHARES
6.5k
VIEWS
Share on FacebookShare on TwitterShare on WhatsApp

The British pound has recovered back towards the 1.3600 area against the US dollar after the pair found strong dip-buying interest from the 1.3535 support area on Wednesday. A knee-jerk reaction to the weak US ADP private sector jobs report caused the brief sell-off in sterling, however, traders still bought the dip as the US dollar remained in a protracted downtrend.

From a technical perspective, the GBPUSD pair is fascinating on many levels at the moment. Bulls are scooping up every major dip and price has been setting fresh multi-year trading highs, with the pair recently testing slightly above the 1.3700 handle.

The fundamentals for the UK economy are horrible now, due the sluggish economic activity, largely prompted by growing COVID-19 infections, and ongoing uncertainty towards the United Kingdom post the nations departure from the EU.

However, sterling does have political stability on its side at the moment, despite the negativity surrounding the UK economy. The ongoing troubles in Washington DC, and concerns about the blue wave in US congress clearly bode well for sterling at the moment.

If UK political stability can continue in 2021, and the UK makes significant progress with overseas trade deals, and if the UK financial sector actually benefits from the recent departure from the EU, then the British pound can certainly continue to trade higher.

Playing devil’s advocate, there are some caveats that sterling traders need to consider when trading the pound in 2021. Firstly, the FTSE100 looks to be on a major breakout, which could hamper sterling’s gains due to the strong inverse correlation between the index and the British pound currency.

Additionally, a number of technical indicators are flagging significant amount of negative price divergence at the moment, which could prompt a steep technical correction towards the 1.3000 region before a major rally truly takes hold.

GBPUSD Short-Term Technical Analysis

The four-hour time frame continues to highlight the overall importance of the 1.3670 level. This is the key level that GBPUSD bulls need to overcome in the short-term to encourage a major push towards the 1.3800 and 1.4000 areas.

If bulls fail to secure the GBPUSD pair above the 1.3670 level, then bears may start to consider the prospect of trying to sink sterling sub 1.3400 and moving the pair into a much lower price range.

Source by ActivTrader.

Warning signs are scattered on the lower time frames at the moment what could ensue if bears breach the 1.3400 level. Firstly, a large bearish reversal pattern will form if the drop reaches 1.3400.

Secondly bearish MACD and RSI price divergences are warning that the recent run higher to the 1.3700 level could quickly unravel. The negative price divergence extends down towards the 1.3000 level.

GBPUSD Medium-Term Technical Analysis

Looking at the daily time chart, the bull trend in the GBPUSD pair remains in play while price trades above the 1.2860 level. Trades should also note that the short-term trend remains bullish while price trades above the 1.3400 level, hence dips are still for buying.

A large inverted head and shoulders pattern has formed on the daily and weekly time frames, which points to medium to long-term gains towards the 1.4500 and 1.5000 levels.

Source by ActivTrader.

The daily time frame also shows that the pattern may not be complete yet, and a final dip towards the 1.3000 area may still take place in order to complete the overall structure of the inverted head and shoulders pattern.

Traders should note that the RSI indicator on the daily time frame is showing that the GBPUSD pair has significant bearish price divergence extending down towards the 1.3100 area.

Tags: Covid-19FTSE100GBPUSD
Previous Post

FTSE100 Technical Analysis – 7,400 now a realistic target

Next Post

December Non-farm Payrolls Preview

Next Post
December Non-farm Payrolls Preview

December Non-farm Payrolls Preview

Please login to join discussion

CALL US

Categories
  • Commodities
  • Economy
  • Forex
  • Index
  • Insights
  • Markets
  • Opening of the Week
  • Sem categoria
  • Stocks
  • World

Site Map

  • Home
  • Markets
  • Charts
  • Economic Calendar
  • World
  • Economy
  • Insights
  • About Us
Português Español русский

A comprehensive website for traders, both experienced and new! Checkout our content and learn how to invest and speculate in the markets using margin traded products. Our team of educators has extensive experience and is here to help. Enjoy!

Follow us on social media

Risk Warning

All financial products traded on margin carry a high degree of risk to your capital. They are not suited to all investors, please ensure that you fully understand the risks involved, and seek independent advice if necessary.

All Rights Reserved - YouTrading UK 2020

Privacy Policy and Terms and Conditions
  • Home
  • My Academy
    • Register Now
    • Login
  • Markets
    • Opening of the Week
    • Stocks
    • Commodities
    • Forex
    • Index
  • Charts
  • Economic Calendar
  • Economy
  • World
  • Insights
  • About Us
No Result
View All Result

© 2020 YouTrading UK - Leaders in Trader Training.

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
__cfduid1 monthThe cookie is used by cdn services like CloudFare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. It does not correspond to any user ID in the web application and does not store any personally identifiable information.
_wpfuuid11 yearsThis cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon.
cf_use_obThis cookie is set by the provider Cloudflare content delivery network. This cookie is used for determining whether it should continue serving "Always Online" until the cookie expires.
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-advertisement1 yearThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
CookieDurationDescription
YSCsessionThis cookies is set by Youtube and is used to track the views of embedded videos.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
CookieDurationDescription
_ga2 yearsThis cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors.
_gid1 dayThis cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
CookieDurationDescription
_fbp3 monthsThis cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website.
fr3 monthsThe cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin.
IDE1 year 24 daysUsed by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile.
test_cookie15 minutesThis cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies.
VISITOR_INFO1_LIVE5 months 27 daysThis cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
CookieDurationDescription
_gat_UA-42160853-21 minuteNo description
cf_ob_infoNo description
CONSENT16 years 8 months 3 days 6 hours 2 minutesNo description
SAVE & ACCEPT
Powered by CookieYes Logo