GBP/USD Forecast: Pressuring 1.4550, Critical Resistance

GBP/USD Forecast: Pressuring 1.4550, Critical Resistance

24 May 2016, 11:43
Roberto Jacobs

GBP/USD Forecast: Pressuring 1.4550, Critical Resistance

The GBP/USD pair surged towards the high posted on Monday following London's opening, fueled by a sharp decline in the EUR/GBP cross, as the common currency entered sell off mode, plummeting to fresh lows against most of its major rivals. 

Public sector net borrowing in the UK excluding public sector banks decreased by £15.7 billion to £76.0 billion in the financial year ending March 2016, and compared to the previous one, not really good news, as it could indicate consumption is in retreat mode.


From a technical point of view, the pair keeps paring gains around the 50% retracement of its latest decline around 1.4550, the level to beat to confirm further gains. In the 4 hours chart, the technical indicators continue recovering from oversold levels, but remain within negative territory, while the price struggles to overcome its 20 SMA which maintains a mild bearish slope. 

An extension beyond 1.4550, should lead to an advance up to 1.4600/10 the 61.8% retracement of the same bearish run. The immediate support is 1.4495, and slides below the level should see the pair retreating towards the 1.4440/60 region, en route to 1.4400.


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