GBP : Forecast

(Wed, 10 Feb 2021). The British Pound has pushed to its highest against the US Dollar since April 2018. Its strength is not exclusive against the Greenback either: progress has also been made against its major counterparts like the Japanese Yen and the Euro. With that in mind, might Sterling’s strength inspire more retail traders to chase the next top? What might that mean for Sterling’s trend going forward?

GBP/USD TECHNICAL ANALYSIS

From a technical standpoint, GBP/USD has extended beyond the midpoint of the Fibonacci extension at 1.3711. That has placed the 61.8% level at 1.3955 in focus. Maintaining the key uptrend since March has been a rising trendline. Negative RSI divergence does show upside momentum is fading, which can at times precede a turn lower. Such an outcome might place the focus on the trendline.

GBP/JPY TECHNICAL ANALYSIS

GBP/JPY has finally reached February 2020 having bottomed in March. This makes for a key zone of resistance between 144.36 and 144.95 – see chart below. As such, we could see a turn lower. In such an scenario, keep a close eye on rising support from December. Below that is the 50-day Simple Moving Average (SMA). These could reinstate the focus on the upside.

EUR/GBP TECHNICAL ANALYSIS

EUR/GBP has extended lower after it pierced the 0.8861 – 0.8881 support zone in late January. Since then, prices have been trading within a bullish Falling Wedge chart pattern. This is as the pair sits above the 61.8% Fibonacci retracement level at 0.8747. A breakout above wedge resistance may open the door to revisiting the 0.8861 – 0.8881 support zone with the 50-day SMA sitting above. Otherwise, downtrend resumption may take the pair to the 0.8671 – 0.8695 support area established in April 2020.

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