GBPUSD testing long term resistance

A break above 1.351 could accelerate upside momentum.

Charts (5)

The US Dollar was bearish against all of its major pairs on Thursday. On the US economic data front, Initial Jobless Claims declined to 712K for the week ending November 28th (775K expected), from a revised 787K in the week before. Finally, Continuing Claims dropped to 5,520K for the week ending November 21st (5,800K expected), from a revised 6,089K in the prior week.                

On Friday, Change in Nonfarm Payrolls for November are expected to fall to 475K on month, from 638K in October. The Unemployment Rate for November is expected to decrease to 6.8% on month, from 6.9% in October. The Trade Deficit for October is expected to grow to 64.8 billion on month, from 63.9 billion in September. Factory Orders for October are expected to rise 0.8% on month, compared to +1.1% in September. Finally, Durable Goods Orders for the October final reading are expected to increase 1.3% on month, in line with the October preliminary reading.      

The Euro was bearish against most of its major pairs with the exception of the NZD and USD. In Europe, the European Commission has reported the Eurozone's October retail sales at +1.5% (vs +0.7% on month expected). Also, Research firm Markit has published final readings of November Services PMI for the Eurozone at 41.7 (vs 41.3 expected), for Germany at 46.0 (vs 46.2 expected), for France at 38.8 (vs 38.0 expected) and for the U.K. at 47.6 (vs 45.8 expected).

The Australian dollar was bullish against most of its major pairs with the exception of the CAD and GBP.

Thursday's largest gainer among the major pairs was the GBPUSD which jumped 149 pips. Looking at a weekly chart, the pair is testing key resistance at the 1.351 level that has been in place since the start of 2018. A break above could have strong bullish implications towards the next key resistance area at 1.378. The 20-week moving average acts as support near the 1.308 level.

Source: GAIN Capital, TradingView

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