Looking at the British pound on the GBP/USD daily MT 4 price action chart, this benchmark Forex market spiked too high and too fast to keep up with the pace of buying.
The 14 day relative strength index (RSI), by the middle of the week, hit a high at seventy (70) which as an overbought signal. This caused the British pound to give back three hundred (300) pips to the U.S. dollar and the GBP/USD currency exchange rate fell lower.
Other technical indicators still look bullish. This includes the 14 day MACD histogram. By the end of the week, the relative strength index was also rebalanced. The British pound is also trading above the fifty, one hundred and two hundred (50, 100, 200) day simple moving averages.
The economic calendar is quite busy to kick the week off. The United Kingdom will publish the monthly Markit purchasing managers’ index as will the United States. The U.S. is also publishing monthly Institute for Supply Management (ISM) manufacturing purchasing managers’ index data.
The European Union will release monthly manufacturing Markit purchasing managers’ index data as well. The euro area is also publishing monthly consumer price index (CPI) data. Germany will release their monthly manufacturing Markit purchasing managers’ index.
Daily British Pound Technical Analysis (GBP/USD)
Looking at price action on the above chat, the GBP/USD Forex market sees preliminary technical resistance lining up at 1.40. The next upside barrier lines up at a key resistance line in play since 2018.
This layer of technical resistance lines up at 1.4110. The next upside barrier lines up at the 2021 high price point at 1.4240 before 1.4240 comes into focus.
On the downside, there is support in play at the February swing low price point at 1.39. The next downside barrier lines up at 1.3820 with the key support level of 1.3755 coming into focus next. The next layer of technical support lines up at the February low price point at 1.3565.