GBPUSD – bulls are pausing under thick daily cloud
GBPUSD strong recovery of past three days lost traction after testing the base of thick daily Ichimoku cloud (spanned between 1.2724 and 1.2918), as increased headwinds were anticipated at this zone.
Traders also reduced speed ahead of key economic data due today (Eurozone inflation and US core PCE index) which are expected to provide fresh signals and await Friday’s US NFP report for August.
Weaker than expected reading would add to growing speculations that the Fed may consider ending its rate hike cycle as economy slows, which should be supportive for sterling.
Bullishly aligned daily studies continue to underpin near-term action which needs to hold above 1.2680 (10DMA / broken Fibo 23.6% of 1.3141/1.2547) to keep positive bias.
Penetration of daily cloud to generate initial positive signal which will require validation on daily close within the cloud and extension through next pivots at 1.2772/74 (daily Kijun-sen / Fibo 38.2% of 1.3141/1.2547).
Caution on dip and close below 1.2680 which would generate initial signal of recovery stall.
Res: 1.2724; 1.2746; 1.2774; 1.2818
Sup: 1.2680; 1.2654; 1.2615; 1.2590