GBPUSD – two-day recovery faces headwinds from falling 10DMA
Profit-taking on dollar longs at the end of Q3 lifts sterling for the second day, pushing the price to one-week high.
Slightly stronger UK economic growth in the second quarter, compared to Q1 and consensus, may boost optimism and add to supportive factors to sterling, though US consumer spending increased in line with expectations and underlying inflation (PCE report) rose marginally in August and suggests that price pressures are subsiding, which would be good news for the US central bank.
Fresh recovery so far retraced 50% of the latest 1.2424/1.2110 bear-leg and cracked pivotal falling 10DMA (1.2259), with close above here needed to strengthen near-term structure for further recovery in coming sessions.
Otherwise, expect the downside to remain vulnerable while the action stays below 10DMA.
Res: 1.2258; 1.2308; 1.2374; 1.2412
Sup: 1.2188; 1.2110; 1.2074; 1.2000
