Fundamental analysis

Technical analysis of GBP/USD for November 02, 2022

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The GBP/USD pair’s rise from the price of 1.1352 resumes today and accelerates to as high as 1.1644 so far. Immediate concentrate is now on 1.1421 resistance turned support, which is close to 100-day EMA (now at 1.1421). The bullish trend is currently very strong for the GBP/USD pair. As long as the price remains above the resistance at 1.1352, it could try to take advantage of the bullish rally. The GBP/USD pair has closed above the pivot point (1.1352) could assure that the GBP/USD pair will move higher towards cooling new highs.

The bulls must break through 1.1420 USD in order to resume the uptrend. Decisive break their argue that such rally is at least correcting the fall from 1.1644 to set at 1.1421. Also, it should be noted that U.S. inflation was 0.25% in November, holding close to its highest annual rate in four decades despite easing energy costs. The GBP/USD pair retreated from around 1.1352, the 50% of Fibonacci retracement of the daily climb measured between 1.1352 and 1.1644, so holds above the former critical resistance, now support at 1.1352.

Today, the GBP/USD pair has broken resistance at the level of 1.1421 which acts as support now. Thus, the pair has already formed minor support at 1.1421. The strong support is seen at the level of 1.1303 because it represents the weekly support 1. Technical readings in the daily chart favor a bullish continuation, as indicators maintain their firmly bullish slopes within positive levels, while the 100 MA heads firmly higher below the current level.

Equally important, the RSI and the moving average (100) are still calling for an uptrend. the GBP/USD pair is continuing rising by market cap at a range between 1.1400 and 1.1644 in coming hours. The GBP/USD pair is trading at 1.1400 after it reached 1 USD earlier. The GBP/USD pair has been set above the strong support at the prices of 1.1400 and 1.1352, which coincides with the 61.8% and 50% Fibonacci retracement level.

The support at 1.1352 has been rejected three times confirming the veracity of an uptrend. The market is likely to show signs of a bullish trend around the spot of 1.1352. Buy orders are recommended above the area of 1.1352 with the first target at the price of 1.1515; and continue towards 1 USD in order to test the last bullish wave. The bullish momentum would be revived by a break in this resistance.

The second bullish objective is located at 1.1550. Crossing it would then enable buyers to target 1.1600 (buyers would then use the next resistance located at 1.1644 as an objective.). Be careful, given the powerful bearish rally underway, excesses could lead to a short-term rebound. If this is the case, remember that trading against the trend may be riskier.

It would seem more convenient to wait for a signal indicating reversal of the trend. On the other hand, if the GBP/USD pair fails to break through the resistance price of 1.1644 USD today, the market will decline further to 1.1352 (return to pivot). In the very short term, the general bullish sentiment is not called into question, despite technical indicators being neutral (RSI).

The material has been provided by InstaForex Company –