The Pound Sterling has gained some ground against the U.S. Dollar, rising above the 1.3050 mark and registering a gain of over 0.15%. This recovery can be attributed to encouraging economic data from the UK, which showed growth in line with expectations. However, a slightly elevated Producer Price Index (PPI) report from the U.S. limited the extent of the Pound’s gains.
GBP/USD Price Forecast: Technical Outlook
The GBP/USD pair appears to have reached a bottom after declining from yearly highs of 1.3434 to a daily low of 1.3010 on October 10. The formation of a ‘hammer’ candle, following a downtrend, suggests a potential reversal in trend.
For a more bullish outlook, the pair needs to surpass the October 10 high of 1.3093, closely followed by the 50-day moving average (DMA) at 1.3099. If this occurs, the next resistance level would be the psychological figure of 1.3100, followed by the October 8 high of 1.3113. Should the momentum continue to strengthen, the next significant resistance zone will be the October 7 weekly high of 1.3134.
Conversely, if GBP/USD fails to breach the 1.3100 level, sellers may step in, pushing prices below the critical 1.3050 mark and driving the exchange rate toward the week’s lows around 1.3010.
From a momentum perspective, the GBP/USD is currently neutral, but the Relative Strength Index (RSI) has shown an upward trend over the past few days, indicating the possibility of further gains ahead.
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