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British Pound Challenges the Rising Trend Channel

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Looking at the British pound (GBP) on the above GBP/USD MT 4 price chart, this headline Forex market is still trying to break above the rising trend channel that has been guiding this currency exchange rate higher since late September.

Even without a decisive break above this trend channel, the British pound looks to be in a good place thanks to a risk on mood throughout the Forex markets that has weakened the safe haven U.S. dollar (USD).

The economic calendar is quiet on Monday. Bank of England, Monetary Policy Committee (MPC) member, Dr. Silvana Tenreyro is giving remarks which could move the British currency. With that said the economic data calendar for the euro area and the United States roars into action after a quiet couple of weeks.

It is all about inflation data out of the European Union. Germany will release their monthly consumer price index (CPI). The Eurozone is also scheduled to release key monthly inflation statistics. The Eurozone is releasing their harmonized consumer prices as well as their monthly consumer price index. The United States is publishing monthly PMI data.

The monthly Chicago Federal Reserve purchasing managers’ index is scheduled for release. Also on the calendar, the Dallas Federal Reserve will release monthly manufacturing data. Monthly pending home sales data is also on the schedule for Monday.

Daily British Pound Technical Analysis (GBP/USD)               

Looking at price action on the daily GBP/USD chart, the relative strength index (RSI) is below overbought levels and below seventy (70). This currency exchange rate is also trading above both the fifty, one hundred and two hundred (50, 100, 200) day simple moving averages.

The first layer of technical resistance to watch lines up at the two month high price point at 1.3398. The next upside barrier lines up at yearly high price point, set in September, at 1.3495. The next upside barrier comes into play at the December 2019 high price point at 1.3510.

On the downside, the former double top at 1.3310 is the first layer of technical support to watch. The next downside barrier lines up at the August high price level at 1.3275. The next layer of technical support lines up at 1.3180 with the key level at 1.31 then coming into play.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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