17, November 2016

GBP/USD (a 4-hour chart)

General overview

The pound weakened on the back of the mixed unemployment data. Unemployment rate fell indicating at labor market possible slow down.

Current situation

As for the technical outlook the pair held a bullish tone during the Asian and European hours on Wednesday. The pound was hovering above 1.2400 trying to extend its recovery. The level 1.2500 appeared to be a strong barrier on its way upwards. After testing the level prices rolled back and reached 1.2400 ahead of the NY session. The price kept struggling with the 200-EMA ahead of London opening. The line limited its further gains in the 4 hours chart. The moving averages are neutral in the same chart. The current resistance is seen at 1.2500, the support is at 1.2400. Technical indicators are neutral now. MACD indicator is at the centerline. If the histogram enters the positive territory, that will indicate buyers’ growing strength. If MACD returns into the negative area the sellers will take control over the market. The RSI indicator was holding near overbought levels, favoring a move lower.

Trading recommendations

Failure to hold above 1.2500 risks a slide to 1.2400. After breaking 1.2400 the level 1.2300 will come back to the radar.