Fundamental analysis

Technical analysis of GBP/USD for November 03, 2022

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Overview :

Currently in a phase of short-term indecision for the GBP/USD pair. In a case like this, you could favour trades in the direction of the basic trend on the GBP/USD pair. As long as you are above the support located at 1.1059, traders with an aggressive trading strategy could consider a purchase. A cross of the resistance located at 1.1282 would be a signal that the basic trade will reverse, and the short-term trend could then quickly become bullish. Buyers would then use the next resistance located at 1.1282 as an objective. Crossing it would then enable buyers to target 1.1300. If the support 1.1170 were to be broken, this would simply be a sign of a possible continuation of short-term consolidation and trading against the trend would then perhaps be riskier.

The GBP/USD pair’s outlook and further decline is expected with 1.1196 minor resistance intact. Current down trend should move from the last resistance levels of 1.1282, 1.1300 and 1.1352.

Moving averages, in the meantime, maintain their bearish slope way above the current level. Furthermore, although the news is bearish for the Pound, professional may not want to sell weakness, but rather following a rebound rally. Additionally, some aggressive counter-trend buyers may be defending parity.

The price will fall into a bearish trend in order to go further towards the strong support at 1.1170 to test it again. The level of 1.1059 will form a new double bottom.

According to previous events, the GBP/USD pair is still moving between the level of 1.1059 and the level 1.1282 (these levels coincided with the last bearish wave and Fibonacci retracement levels 38.2% and). It should be noted that the 1.1282 price will act as a major resistance on Nov. 2022. Therefore, it will be too gainful to sell short below 1.1282 and look for further downside with 1.1170 and 1.1059 targets. It should also be reminded that stop loss must never exceed the maximum exposure amounts. Thus, stop loss should be placed at the 1.1352 level today.

The volatility is a statistical measure of a market’s price movements in a given period of time. If prices for a currency have shown large instability over a short time period, then the market is highly volatile. If currencies are relatively stable, then volatility is low.

In the very short term, the general bullish opinion of this analysis is in opposition with technical indicators. So long as the invalidation level of this analysis is not breached, the bullish direction is still favored, however the current short term bearish correction should be carefully watched.

The material has been provided by InstaForex Company – www.instaforex.com