Cable has been climbing steadily since December but looks due for a pullback to nearby support levels.
Can the ascending trend line keep losses in check?
Better keep tabs on these inflection points on the 4-hour time frame:
GBP/USD 4-hour Forex Chart Faster With TradingView
All that talk of a dovish Fed and dollar debasement has allowed Cable to stage a steady climb past the 1.3600 barrier last month.
Trump’s next Fed Chair pick, however, is seen to be a hawkish candidate that could push for higher U.S. interest rates for much longer. Because of that, GBP/USD has been on the retreat so far this week, pulling back to the 38.2% Fib visible on the 4-hour chart.
Can this area hold as a floor?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
A bounce off current levels could sustain the rally, possibly lifting Cable back up to the swing high near R1 (1.3820) or to fresh ones at R2 (1.3960).
A larger correction could still test the 50% Fib closer to S1 (1.3590) and the 1.3600 former resistance or the 61.8% level closer to the ascending trend line that’s been holding since mid-November last year.
Just be sure to keep your eyes peeled for long red candlesticks falling through the trend line support, as these could hint that a reversal is in the works!
Don’t forget that the Bank of England (BOE) is scheduled to announce its monetary policy decision soon and likely set expectations for future interest rate changes.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
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