GBP/USD yesterday closed above an important channel resistance at 1.6180 after US Consumer Confidence report showed worse than expected situation. The Conference Board said its index of US consumer confidence declined to 70.4 in November from 72.4 in October. Analysts had expected the index to rise to 72.9 this month.
At the time of writing the cross is hovering around 1.6218 and an immediate hurdle is seen around 1.6251 which is a very strong trendline resistance on daily chart.
Breakout or Triple Top formation?
Daily close above 1.6251 will ultimately break the double top price pattern and we may see new yearly highs above 1.6250-1.6260 region for the first time in as many months. If price gets rejected from 1.6250, we will have a triple top price formation in that case, which is considered a very strong indication of bearish reversal.
Major Support Levels
On downside, immediate barrier is seen at 1.6208 (Channel Support), ahead of 1.6156 (76.4% fib level of recent drop). A break below this level may trigger further losses up to 1.6100-1.6085 region where we have 61.8% fib level and 55-Day Simple Moving Average (SMA).
A few important fundamental events are due today that will determine the long term direction of cable-greenback pair, those events include:
- Britain’s Gross Domestic Product (YoY) Q3: Previous 1.3%, Expectation 1.5%
- US Durable Goods Orders (Oct): Previous 3.8%, Expectation -1.9%
- Initial Jobless Claims (Nov 22): Previous 323K, Expectation 330K
Mark Carney Comments
Yesterday Bank of England Governor Mark Carney hailed the fall in the U.K. unemployment rate to 7.6% in the third quarter, but reiterated that the bank’s 7% target for unemployment was a threshold at which the bank would consider raising interest rates.
On the economy, Carney said that "all the elements" were in place for a pick-up in activity. The comments came during testimony on the BoE’s quarterly inflation report before parliament’s Treasury committee.