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GBP/USD - Anticipating a Correction Rally and the Next Support Factors

The GBP/USD is fell sharply last week after the NFP boosted the USD across the board. The US jobs report surprised to the upside, showing that 248K jobs were added in September. The unemployment rate also fell to a 6-year low at 5.9%.

The GBP/USD fell into fresh lows on the year, breaking the previous 1.6051 low, and breaking the 1.60 handle, which we will see was a key support. It finally stalled at 1.5950 and is now consolidating. 

If we get a pullback to 1.61, up to 1.6160, we should expect sellers if the GBP/USD is still bearish. A break above 1.62 might be needed to introduce any meaningful bullish correction or consolidation.

(GBP/USD 4H Chart)

When we look at the weekly chart we can see that price has been sharply bearish, and last week's candle screams bearish continuation. We can see that the support factors, 50% retracement and the 200-week SMA did not hold up at 1.60. Now, the next support factors are in the 1.5720-1.5750 area, which contains the 61.8% retracement and a previous resistance pivot in 2013.

(GBP/USD Weekly Chart)