GBPUSD Continues Slow & Steady Slide

The Great Britain Pound (GBP) inched lower against the US Dollar (USD) on Friday, dragging the price of cable to less than 1.2175 as the pair continues trading in a tight range after a flash crash earlier this month. The technical bias remains bearish because of a Lower Low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 1.2166. A support can be seen around 1.2080, a major horizontal support level. A sustained break below the 1.2080 support shall incite renewed selling pressure, validating a move towards the 1.1910, the swing low of the last major dip.

On the upside, the pair is likely to face a hurdle near 1.2352, the high of the recent range ahead of 1.2759, the intraday high before the recent flash crash and then 1.2864, the horizontal resistance area. The technical bias will remain bearish as long as the 1.3444 resistance area is intact.

US Durable Goods

New orders for U.S. manufactured capital goods unexpectedly fell in September amid weak demand for computers and electronic products, which could temper expectations for an acceleration in business spending in the fourth quarter. The Commerce Department said on Thursday that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.2 percent after three straight months of strong gains. Economists polled by Reuters had forecast core capital goods orders rising 0.3 percent last month after a previously reported 0.9 percent increase in August.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair on a breakout below the 1.1900 levels could be a good strategy in short to medium term. Alternatively, playing the range can also be a good option if you follow scalp trading style.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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