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On Tuesday, GBP strengthened against USD to close above 1.6060 – 1.6080 resistance zone representing the 23.6% Fibonacci Retracement Level of its rally from a low of 1.5267 on June 1 to its recent high of 1.6309 struck on Sept. 21.
As was already mentioned in previous report, after decisively moving above the 1.6060 - 1.6080 resistance zone the pair continued extending the short-term up-move.
The pair, on Wednesday, climbed to 1.6173 after better than expected UK jobs data and is currently quoting at 1.6163 after testing the descending trend-line resistance, currently at 1.6175.
Now should the pair manage to break above the descending trend-line resistance, the upward momentum is likely to get extended towards intermediate strong resistance zone, pegged near 1.6210 - 1.6220, which if conquered, can lead further up-move for the currency pair even beyond the very strong resistance zone near 1.63 – 1.6330 zone, September high.
On the downside, 1.6080 – 1.6060 zone now seems to act as important support for the currency pair. Immediate support on the downside is seen near 1.6130 – 1.6140 zone.
Should the pair again slip below 1.6080 – 1.6060 support zone, short-term momentum for the pair would turn bearish and the pair seems vulnerable to further downfall, initially towards 1.5910 support – 38.2% retracement level and further towards sub 1.5800 level.
Investors would watch for a decisive break above 1.6175 trend-line resistance to initiate any fresh long position. Also look for a decisive break below 1.6130 – 1.6140, immediate support zone, for opportunity to initiate momentum short position.
Haresh Menghani
Market Analyst
Admiral Markets
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