GBP/USD the behavior could change again January 11, 2017

The GBP/USD has decreased today and has managed to reach new lows, but the bears weren’t strong enough to maintain the price lower, has decreased only because the USDX has tried to rebound, the index had increased in the first part of the day, but the sellers have stepped in again in the United States trading session and have forced the greenback to drop again versus its rivals. The GBP/USD continues to move sideways on the short term, is trapped between two important levels, so the price could move in range further in the coming weeks if the USDX will stay below the 102.54 static resistance.
The Pound has decreased on the mixed UK data, the Industrial Production rose by 2.1% in November 2016, beating the 0.8% estimate, the indicator has increased again after the 1.1% drop from October, but the main event was the release of the Manufacturing Production, which has increased by 1.3% in November, has come better versus the 0.6% prediction, unfortunately the Pound wasn’t inspired and has remained soft in the European trading session. Moreover the UK’s Goods Trade Balance indicator has fallen further, from -9.9B to -12.2B, has come in worse compared to the -11.2B estimate, while the Construction Output has disappointed as well because has fallen by 0.2%, even if the currency traders have expected to see 0.3% growth in November, but unfortunately the economic indicator continues to decrease.
The BOEGov Carney testified today before the Parliament’s Treasury Select Committee, in London, the President-Elect Trump has also spoken today. The price was driven by the fundamental factors in the afternoon, we’ll see how will react in the last two days of the week because the US is to release high impact data.


You can see that the price has fallen below the 1.2087 static support and below the lower median line (LML) of the major descending pitchfork, but has failed to stay there and now is struggling to bounce back and to climb towards new highs again. The rate is trapped between the 1.2087 static support and the 1.2795 horizontal resistance, could resume this range movement if the USDX will slip lower and if will stay below the 102.54 static resistance. A rejection here will send the rate again towards the 50% Fibonacci line (descending dotted line), could climb even towards the median line (ML) of the major descending pitchfork if we'll have a larger drop on the USDX. However the price could still reach and test the first warning line (wl1) of the ascending pitchfork before will try to start a broader rebound. We'll have a clear direction only when the price will escape from the extended sideways movement.


I've added a minor ascending pitchfork on the H4 chart, but we have to wait until the price will validate this pitchfork, you can see that the price has increased and has climbed above the median line (ml), could find temporary resistance at this level and could drop to retest the lower median line (lml) before will climb much higher.

Leave a Reply