GBPUSD – key supports remain under increased pressure but signals from Jackson Hole likely to define direction
GBPUSD came under renewed pressure on Thursday and tested again key supports at 1.2637/26, after Wednesday’s dip to these levels was short-lived and left daily Doji candlestick with long tail.
Better than expected US weekly jobless claims lifted dollar and sent sterling lower again, though fresh bears again face headwinds at 1.2637/26 zone (100DMA / Fibo 61.8% of 1.2307/1.3140) where attacks have been already rejected three times.
Technical picture is bearish on daily chart, with negative bias to remain in play while the price stays below 10DMA (1.2715), though extended sideways mode to be expected in case of another downside rejection.
Markets await fresh signals about interest rates from Friday’s speech of Fed chief Powell in Jackson Hole symposium, with growing expectations that the central bank’s tone would be softer, in light of recent economic data which signal further slowdown in business activities and warn of stronger consequences on the western economies from already high interest rates and possible further tightening.
Firm break lower would signal an end of consolidation phase and continuation of broader downtrend towards targets at 1.2504/1.2394 (Fibo 76.4% / 200DMA).
Conversely, lift above 10 and 20DMA’s (1.2715 / 1.2734) would ease pressure, but break and close above recent tops (1.2800/18) will be needed to signal reversal and formation of a higher base and 1.2620 zone.
Res: 1.2665; 1.2715; 1.2734; 1.2777
Sup: 1.2614; 1.2590; 1.2504; 1.2394