Monthly jobs, inflation, and growth numbers will hit the screens this week and, once the dust settles, Sterling’s short-term outlook will be a lot clearer.
Cable is currently testing 1.26 big figure support, a level that was sharply broken and then quickly regained at the start of last week. GBP/USD also traded below the 200-day simple moving average for the first time since mid-November, but again this technical indicator was quickly regained. GBP/USD bulls may find it difficult to push above the 1.2662/1.2673 level, unless this week’s data is supportive, while last Monday’s low of 1.2519 should hold short-term selling pressure.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise./GBP continues to trade below a prior level of support around 0.8549 as the Euro weakens further. All three simple moving averages are in a bearish formation and the pair may re-test the recent multi-month low at 0.8513. Below here, 0.8503 comes into focus.
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