Price Analysis of GBP/USD: Retakes Mark 1.3400 to Move towards Channel Resistance

Price Analysis of GBP/USD: Retakes Mark 1.3400 to Move towards Channel Resistance

Mar 1 • Forex News, Top News • 312 Views • Comments Off on Price Analysis of GBP/USD: Retakes Mark 1.3400 to Move towards Channel Resistance

The GBP/USD pair rose to a daily high during the mid-European session. The pair now looks to continue the rise beyond the 1.3400 mark.

It has now filled the weekly bearish gap amid some intraday US dollar selling as the pair rallied around 100 pips on Monday from the 1.3300 mark. Nervousness about the worsening situation in Ukraine eased when the Russian negotiator said they were looking forward to a fast agreement. 

As a result, the equity markets recovered nicely, denting demand for safe-haven greenbacks and helping to drive the GBP/USD pair’s solid intraday rally.

Based on technical analysis, the move was up from 1.2675, which was the low on September 23. It has followed an upward sloping channel and is a well-established bullish trend. A dip-buying pattern in the 1.3285-80 region, along with the emergence of some dip-buying, supports extended appreciation prospects.

On the daily chart, technical indicators showed bullish bias and are still far from being overbought, adding to the positive outlook. Therefore, it’s prudent to avoid placing aggressive bullish bets before GBP/USD fails to break through the channel resistance.

GBP/USD: Technical Levels to Watch

Overview

Today last price1.3389
Today Daily Change-0.0023
Today Daily Change %-0.17
Today daily open1.3412

Trends

Daily SMA201.354
Daily SMA501.3521
Daily SMA1001.3502
Daily SMA2001.3673

Levels to Watch

Previous Daily High1.3439
Previous Daily Low1.3366
Previous Weekly High1.3638
Previous Weekly Low1.3273
Previous Monthly High1.3749
Previous Monthly Low1.3358
Daily Fibonacci 38.2%1.3411
Daily Fibonacci 61.8%1.3394
Daily Pivot Point S11.3373
Daily Pivot Point S21.3333
Daily Pivot Point S31.33
Daily Pivot Point R11.3445
Daily Pivot Point R21.3478
Daily Pivot Point R31.3517

A Steep Decline in US Treasury Bond Yields is expected.

The Ukraine-Russia dialogue has already occurred in Belarus, and Russian media call it a ‘peace talk.’ The Ukraine-Russia dialogue has already happened in Belarus, and Russian media call it a ‘peace talk.’

A Ukraine-Russia dialogue has already been held in Belarus, and Russian media call it a ‘peace talk.’

A Ukraine-Russia dialogue has already been held in Belarus, and Russian media call it a ‘peace talk.’ In Belarus, a Ukraine-Russia dialogue has already been held. The Russian media is calling it a ‘peace talk.’

This raises expectations for some de-escalation of tensions. However, a steep drop in Treasury bond yields combined with a lesser likelihood of a March rate hike also hurt the greenback. 

Investors now seem convinced that the Fed will not take an aggressive stance to combat stubbornly high inflation due to recent geopolitical developments.

Will the GBP/USD pair continue to trend amid the Ukraine conflict?

The GBP/USD pair is yet to see whether it can continue its trend or whether it encounters new supply amid the potential for further escalation in tensions between the West and Russia.  

In response to Russia’s invasion of Ukraine, Western nations stepped up efforts to punish the country, including imposing tough new sanctions. As a result, some Western banks were cut off from SWIFT. 

On Sunday, Russian President Vladimir Putin increased the ante and increased the country’s nuclear alert status.

Therefore, it would be prudent to position for any meaningful gains only after some follow-through buying has taken place. Markets will remain focused on fresh headlines regarding the Ukraine crisis without significant economic releases. As a result, the risk sentiment of broader markets and the Dollar price dynamics will continue to significantly impact the GBP/USD pair.

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