On Wednesday, unexpected decline into the UK Services PMI provided across the board weakness to the GBP; however, the Pound gained against its Australian, New Zealand and Swiss counterpart on Thursday ahead of the BoE monetary policy meeting. Market players await Friday’s US Labor market details in order to determine near-term Forex moves.
Given the backdrop, the following is a brief technical overview of GBPAUD, GBPNZD and GBPCHF.
Failure to break the ascending trend channel resistance drove down the GBPAUD that seems declining towards testing 1.9360 support, including 23.6% Fibo of its September 2014 to February 2015 up-move. On the break of 1.9360, the 1.9200 and the 23.6% Fibo, near 1.8950, immediately followed by the 1.8860 – 1.8850 support-zone, including 100-day SMA and support-line of the channel, are likely restricting the decline of the pair. Should it break below 1.8850, it can register considerable decline to 1.8400 region. On the upside, 1.9830 and the 2.0000 psychological mark, quickly followed by the trend channel resistance, near 2.0080, could restrict the near-term upside of the pair. On the sustained break of 2.0080, the pair could gain noticeable gains to rally towards 2.0600 mark.
Even if the pair broke its descending trend channel and closed below the 50-day and 100-day SMA on Wednesday, the GBPNZD reimbursed its losses on Thursday and rallied back to the descending trend channel. The pair currently targets the 2.0350 resistance mark, breaking which 2.0480 and the 23.6% Fibonacci Retracement of its January – February up-move, near 2.0530, could become intermediate resistances before the pair tests upper line of the channel, near 2.0700 that restricts the near-term up-move of the pair. On the break of 2.0700, the pair could rally towards 2.0860 and the 2.0930 marks. On the downside, support-line of the channel and the SMA crosses, near 2.0200 – 2.0180 region, could provide immediate support to the pair. On the break of 2.0180, 50% Fibo, near 2.0080, and the 61.8% Fibo, near 1.9880, are important support levels that could restrict pair’s decline. Should it register a close below 1.9880, chances of near-term up-move gets negated and the pair can become vulnerable to test sub-1.9600 levels.
Also Read: Technical Outlook: Important JPY Pairs
Ascending trend channel continue supporting the GBPCHF up-move; however, the 100-day SMA continue providing strong resistance to the pair near 1.4830 while the 1.4650, including 76.4% Fibonacci Retracement of its October 2014 – January 2015 decline, provides immediate support to the pair. Considering the comparative strength of the GBP and the ascending trend channel formation, the pair is more likely to break the 100-day SMA resistance and could rally towards 1.4970 horizontal resistance mark which can trigger pair’s up-move towards 1.5130, 1.5260 and the 1.5400 marks. Alternatively, a break of 1.4660, which also including the support line of the channel, could provide considerable weakness into the pair towards testing 1.4400 support level. A sustained break of 1.4400, could weaken the pair towards testing 1.4140 support, which marks the 61.8% Fibo.
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