GBP needs a stronger signal 1/9/2023

The British pound moved away from its recent gains after finding a strong resistance level at 1.2720, explaining that consolidation above the level above is an essential condition for continuing the rise, forcing the pair to trade negatively to retest the support level of 1.2645, recording its lowest level at 1.2653.

On the technical side today, and by looking at the 4-hour chart, trading stability below the pivotal resistance 1.2720, 50.0% Fibonacci retracement, supports the possibility of a decline accompanied by the beginning of negative pressure for the 50-day simple moving average. On the other hand, trading stability above the strong support floor 1.2620, 61.80% correction, increases the possibility of resuming the upward trend.

With conflicting technical signals, we find it difficult to determine the direction accurately, and we prefer to monitor price behaviour, waiting one of the following scenarios:

Confirming a break of 1.2620 puts the pair under strong negative pressure, with a target of 1.2555, and losses extend towards 1.2500, while a break upwards and the price consolidates above 1.2720. From here, the pair recovers with targets starting at 1.2775 and extending towards 1.2820 initially.

Note: Today we are awaiting high-impact economic data issued by the American economy (US jobs data NFP, average wages, unemployment rate and manufacturing PMI), and from the Canadian economy, we are awaiting “Gross Domestic Product” and we may witness high volatility at the time the news is released.

Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.

S1: 1.2635	R1: 1.2720
S2: 1.2600	R2: 1.2775
S3: 1.2555	R3: 1.2820