GBP facing temporary negative pressure 11/8/2022

The British pound reversed the expected daily bearish trend, benefiting from the decline in the US dollar after inflation data. We have clarified that attempts to breach 1.2130 led the pair to visit 1.2230 to record the highest level at 1.2277.

Technically, by looking at the 4-hour chart, we find the simple moving averages returned to hold the price from below, supporting the upside. On the other hand, we find a decline in the bullish momentum accompanied by the negativity of the stochastic indicator.

We may witness a bearish tendency in the coming hours, targeting a retest of 1.2100 before attempts to rise again as long as the pair is stable below 1.2250, knowing that rising above the mentioned level leads the pair to recover with an initial target of 1.2300 and extend later towards 1.2390.

Note: The US Producer Price Index is due later in the session; it has a big impact and may cause price volatility.

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: 1.2065	R1: 1.2300
S2: 1.1975	R2: 1.2395
S3: 1.1870	R3: 1.2500