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On Tuesday, GBP gave up early gains against USD to hit the lowest level since Sept. 10 as UK manufacturing production fell more than expected and on concerns over global slowdown after the IMF slashed its forecast for global growth.
On Wednesday, GBP held steady against USD before the industrial production data from France and Italy.
The pair is currently quoting at 1.5988, near the 50-day SMA area.
The pair closed below the 1.6080 – 1.6060 support zone confirming the Double Top formation and now the pair seems to be vulnerable for further depreciation, initially towards 1.5910 support – 38.2% retracement level and further towards 1.5800 – 1.5820 zone, the 200-day SMA support area.
Intermediate support for the currency pair is pegged around 1.5950 – 1.5940 zone and further near 1.5870 – 1.5880 ahead of the important supports near 1.5910 and 1.5800 levels.
On the upside, 1.6010 – 1.6020 seems to act as immediate resistance for the currency pair followed by strong resistance zone near 1.6060 area representing the 23.6% Fibonacci Retracement Level of its rally from low hit in June to high formed in September.
Short-term bias for the currency pair remains on the downside, however, technical indicators suggest a period of consolidation for the pair between 1.5950 – 1.6050 range before resumptions of its downtrend towards 1.5910 level and further towards 1.5820 – 1.5800 support zone.
Intraday Important Technical Levels
Support 1 – 1.5951 Resistance 1 – 1.6023
Support 2 – 1.5909 Resistance 2 – 1.6072
Support 3 – 1.5858 Resistance 3 – 1.6117
Haresh Menghani
Market Analyst
Admiral Markets
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