Friday’s Outlook Of GBP/USD: Consolidating Gains

The Cable is consolidating along with the EUR/USD as investors cash in some profits after Wednesday’s furious rally.  Despite the slight pullback, the Cable is now comfortably above the downtrend line which we view as the last line of moving average resistance preventing the currency pair from continuing its uptrend.  Therefore, despite the immediate obstacles presented by February highs, Wednesday’s move should mark the end of the downtrend for now.

As we’ve seen in the past, large sudden movements are normally followed by successive aftershocks and a perpetuation of the movement’s momentum.  However, keeping this in mind, the GBP/USD could still experience some near-term profit-taking and has dropped below our near-term trend line.

Furthermore, as we mentioned before, February highs and the psychological 1.50 barrier wait in the distance.  Britain is taking the day off from economic data.

Fundamentally, we maintain our resistances of 1.4424, 1.4505, 1.4554, and 1.4617.  The 1.45 area will serve as a psychological barrier for the time being.  To the downside, we hold our supports of 1.4370, 1.4310, 1.4255 and 1.4196.   The GBP/USD is currently exchanging at 1.4417.

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