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GBP/USD Daily Chart

GBP/USD Price Chart - Daily Timeframe

Technical Outlook:GBP/USD has continued to trade within the confines of an ascending pitchfork formation extending off the yearly low with price rebounding offslope support last month. The subsequent pullback off the monthly open highs rebounded off near-term support at the 38.2% retracement of the August advance at1.3320 with sterling topping the performance charts today vs the USD.

The outlook remains constructive while above confluence support at1.3226 with a breach above1.3543 needed to mark continuation of the broader uptrend. A breakout eyes subsequent resistance objectives atthe yearly high close at1.3589and the 2017 high / Brexit gap at1.3658/75.

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GBP/USD 240min Chart

GBP/USD Price Chart - 240min Timeframe

Notes:A closer look at price action highlights a near-termdescending channel formation with a prefect rebound off the lower parallel last night shifting the focus back towards the weekly open at1.3436- a breach above this level clears the way for an advance targeting the high-day close at1.3495 and the 1.618% extension at1.3543.

Bottom line: I’ll favor buying pullbacks in price while above1.3320 targeting a breakout of this near-term formation. A break lower would leave prices vulnerable for a drop into1.3283 & our broader bullish invalidation at1.3226. Keep in mind that U.S. November Non-Farm Payrolls (NFP) are on tap tomorrow with the release likely to fuel increased volatility in the dollar crosses.

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GBP/USD IG Client Sentiment
  • A summary ofIG Client Sentimentshows traders are net-short GBPUSD- the ratio stands at -1.19 (45.6% of traders are long) – weakbullishreading
  • Retail has remained net-short since Nov 21st, price has moved 1.2% higher since then
  • Long positions are11.9% lower than yesterday and 9.6% lower from last week
  • Short positions are9.1% lower than yesterday and 21.1% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of currentpositioning and recent changes gives us a further mixed GBPUSD trading biasfrom a sentiment standpoint.

See how shifts inGBP/USD retail positioning are impacting trend-Click here to learn more about sentiment!

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Relevant Data Releases

GBP/USD Economic Calendar

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- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter@MBForex or contact him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Source https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/scalping_report/2017/12/07/GBPUSD-Responds-to-Confluent-Support-Outlook-Constructive-Above-1.3226-MB.html?DFXfeeds=forex:fundamental:daily_briefing:daily_pieces:scalping_report



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