1.2350 Support Key for Bullish Continuation – buzzfeed.work



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GBPUSD is having an intriguing week thus far and largely at the mercy of the DXY. There has been a lack of concrete data on the economic docket to give GBP any sort of impetus as market sentiment and its effects on the dollar dominate.

This theme has continued this morning as GBPUSD has rallied higher and almost recovered the entire Tuesday selloff which touched a low of 1.2387. Sentiment improved overnight as markets appear satisfied that the news out of First Republic Bank in the United States would have no lasting impact on sentiment or trigger a fresh selloff in bank stocks. US earnings released after the US close yesterday also provided a further boost with the US dollar facing renewed selling as a result. US Tech giants Microsoft and Alphabet (Google) reported upbeat Q1 earnings.

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Given that the theme of the week has been overall market sentiment and its effects on the US dollar I don’t expect that to change. A light day on the economic docket with US Durable Goods data the only notable release. I see potential for a retest of the recent highs by GBPUSD should market sentiment remain upbeat for the rest of the week. This coupled with a hawkish narrative surrounding the Bank of England (BoE) in light of last week’s UK inflation data should keep GBP supported ahead of the FOMC meeting next week.


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On the daily timeframe GBPUSD has recovered the majority of yesterdays selloff following an excellent start to the European session, trading at 1.2475. The technical picture for GBPUSD is rather murky with a lot of indecision of late as market sentiment has been the key driver.

Yesterday saw a bearish engulfing daily candle close which was also the worst day for the pair in just over a week. Instead of following through today however we have seen a complete reversal with the pair on the verge of a retest of the 1.2500 level once more. What’s even more baffling is that there was early signs of a head and shoulder pattern forming on the daily timeframe (See chart below) as well as a death cross on the H4 timeframe as the 50-day MA crossed below the 100-day MA.

Recent moves on GBPUSD have largely been driven by overall market sentiment with the range between 1.2350 and 1.2550 providing potential range bound opportunities. A daily candle close above or below the range top or bottom is key for bullish continuation or a deeper correction to the downside.

Key Levels to Keep an Eye Out For

Resistance levels:

Key support levels:

GBP/USD Daily Chart – April 26, 2023


Source: TradingView


IGCS shows retail traders are currentlySHORTonGBP/USD, with59%of traders currently holding SHORT positions. At DailyFX we typically take a contrarian view to crowd sentiment resulting in a short-term bullish bias which could see the YTD high come under threat.

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Written by: Zain Vawda, Markets Writer for DailyFX.com

Contact and follow Zain on Twitter: @zvawda


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