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15 Nov 2019
2 min read

GBP/USD Ending Of the Week Update

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Written by OspreyFX News Team

GBP/USD Ending of the week update:

  • Comatose in a bullish pattern, awaiting the next catalyst.
  • The 200 SMS shows a rest zone for the bears.
  • Signs of a possible bullish pattern formation may direct the Cable beyond the 1.30 area.

GBP/USD comatose in a bullish pattern, awaiting the next catalyst

The month remains negative for the Sterling across the board. Hovering below the 1.2900 handle, but its overall trend stays in a range bound. Based on what we see in the H4 chart, the pair continues to trade below the resistance level and round-figure of 1.3000. Where a strong barrier has been since October.

A support zone established in the 1.2770 neighbourhood has helped to keep the range untouched, in the context of a strong rally since mid-October. Overall, GBP/USD has already broken a bullish trend line, but it may only be a slight move that could favour a correction supporting the bulls’ force. However, such a breakout exposes the 1.2773 zone, and if it gives up, a leg lower could happen towards the 200 SMA. Which acts as a dynamic support in the previous month.

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200 SMA as a rest zone for the bears

That moving average can give up allowing further losses and if such a scenario materialises, then all eyes will be on the 1.2579 level. Beyond that area, the next target for the bears would be the bullish trend line drawn from the lows of September.

A strong barrier around that region could allow Cable to gather bullish momentum to resume the overall bullish tone.

Will the GBP/USD pair go beyond 1.30 soon?

Moving to the upside, there are signs of a possible bullish pattern formation in the H4 chart. This could permit further gains toward the 1.3000 handle. If the pair goes above that level, we could well see a rally to reach the 1.3181 level, ahead of the 1.3306 zone.

If the bulls take control of the situation, then it could invalidate a short-lived bullish outlook for GBP/USD. Resulting in a shift towards a mid-term consolidation. According to the technical oscillators, the RSI indicator will stay in the neutral territory and momentum will keep its range stance as well. Favouring further consolidation at the current stage and it is a matter of time until a green light appears for the bulls.