Suggestion for Trade: Buy at 1.6260, SL 1.6240, TP, 1.6480
GBP/USD yesterday gave a negative closing at 1.6364 thus activating the previous bearish pin bar off 1.6483 resistance which is considered a good indication of the downward trend.
Major Support & Resistance Levels
At the moment of writing cable is being traded at 1.6345 where it is expected to find immediate support around 1.6260 (old double top resistance now support), ahead of 1.6191 (55 DMA) and then trendline support (currently 1.6163). A break and close below trendline support may push cable-greenback pair into a strong bearish trend targeting 1.6075 zones.
On upside, the pair is likely to face immediate hurdle around 1.6349-1.6358 resistance area where a number of moving averages currently sit-in. A break above this region may open doors for trendline resistance (currently 1.6488). A break and daily close above trendline resistance will be highly bullish for cable targeting 1.6520.
MACD is not showing any signs of divergence however weakness can be noted as MACD line is well below the signal line. Relative Strength Index (RSI) is neutral which means there is a possibility of rallies as well as dips. We have got a bearish crossover with 55 MA and 100 MA at four hour timeframe which is an alert signal that bullish trend might be ended soon; daily Moving Averages are still very bullish though.
Today Britain’s Gross Domestic Product (GDP) report for the third quarter once again printed a better than forecast reading which was 1.9% against 1.3% previous figure, analysts had predicted 1.5% growth. It is pertinent that we have got a series of impressive economic figures about the UK economy resulting in a significant boost in GBP/USD and other GBP pairs. The pair, however, failed to reverse the bearish trend after GDP data amid a recent tapering announcement by US Federal Reserve.