GBP/USD Remains Susceptible to Bear Flag Formation
GBP/USD remains susceptible to a bear-flag formation as the 50-Day SMA (1.2893) reflects a negative slope.
Share this:
British Pound Outlook: GBP/USD
GBP/USD extends the recent series of higher highs and lows to register a fresh weekly high (1.2812), but the exchange rate remains susceptible to a bear-flag formation as the 50-Day SMA (1.2893) reflects a negative slope.
GBP/USD Remains Susceptible to Bear Flag Formation
Keep in mind, GBP/USD trades within an ascending channel after failing to test the May low (1.2446), and the exchange rate may further retrace the decline following the US election as it extends the advance from the weekly low (1.2617).
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
In turn, GBP/USD may negate the bear-flag formation should it show a limited response to the negative slope in the moving average, but a continuation pattern may unfold should the exchange rate struggle to extend the bullish price series.
With that said, the recent recovery in GBP/USD may turn out to be temporary if it fails to hold within the ascending channel carried over from last month, and the exchange rate may stage further attempts to test the May low (1.2446) should it respond to the negative slope 50-Day SMA (1.2893).
GBP/USD Price Chart –Daily
Chart Prepared by David Song, Strategist; GBP/USD on TradingView
- GBP/USD approaches channel resistance as it carves a series of higher highs and lows, with a break/close above 1.2820 (38.2% Fibonacci extension) raising the scope for a move towards the 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) region.
- Next area of interest comes in around 1.3000 (38.2% Fibonacci retracement) to 1.3010 (61.8% Fibonacci extension), but lack of momentum to close above the 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) zone may curb the recent advance in GBP/USD.
- Failure to hold within the ascending channel may push GBP/USD back towards the monthly low (1.2617), with a break/close below 1.2540 (78.6% Fibonacci retracement) bringing the November low (1.2487) on the radar.
Additional Market Outlooks
Australian Dollar Forecast: AUD/USD Eyes Yearly Low Ahead of RBA
Gold Price Outlook Mired by Flattening Slope in 50-Day SMA
EUR/USD Struggles to Trade Back Above Former Support Zone
USD/CAD Defends Post-US Election Rally to Eye November High
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
DAX forecast: AI optimism offers relief ahead of central bank meetings
The DAX is finding some relief from the recent improvement in risk appetite, with investors becoming less concerned about the sustainability of the AI trade
Gold outlook: XAU/USD holds above key support ahead of FOMC
Gold forecast hangs in the balance as the metal is clinging to $4,000 ahead of the Fed, but higher oil prices and firm yields are making it hard for the metal to turn its rebound into a sustained rally. But can that change soon?
Silver Forecast: Is XAG/USD Finally Finding a Bottom
Silver is showing some encouraging signs after an initially weak start to the session. The metal dropped to a new year-to-date low below the $53 handle, reaching $52.60 before staging a sharp recovery.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.