Analysts at UOB Group believe that Cable might be going towards the 1.390 level or perhaps higher in the next weeks. On a 24-hour basis “Stable upward trend implies that the present gain in GBP is prone to fracture 1.3850 and go toward 1.3885,” They said on Friday. “The big barrier at 1.3910 is certainly out of reach,” he said. This was confirmed when the Pound rose to 1.3891 before dropping again. Strongly overvalued conditions imply that the recent GBP surge is poised to take a break at this point. This means GBP is projected to move in a range of 1.3825 and 1.3890 for today.”
What’s coming up in the coming 1-3 weeks: “There isn’t much to contribute to the Friday update” (03 Sep, spot at 1.3835). It has been noted that the GBP is poised to rise to 1.3910 as a result of the increased pace. Later, the GBP surged to 1.3891 before tumbling back down. If GBP doesn’t go below 1.3790 (last Friday’s “firm resistance” mark was at 1.3760), the present optimistic outlook will stay unchanged.
Brexit Worries- GBP/USD Falls Below 1.3850
A recovery in the US dollar and Brexit worries has kept the GBP/USD at 1.3850. Some leading figures demand “commensurate and organized” border control in Northern Ireland because of Brexit. Holidays in the United States might limit market movements in the face of rising risk appetite.
GBP/USD CHART. Source: Tradingview.com
On the technical side, the advance up recently halted around a barrier defined by the upper border of an upward pattern that has been in place for over two weeks. For short-term investors, this resistance should function as a crucial stage in the range of 1.3890-1.3900. 1.3800 is the 200-period SMA on the 4-hour chart and any additional drop currently appears to have solid support.
On each side of the 1.3785 level is strong rising band support that might trigger some tactical trading. To finish off its decline, the unit is likely to head towards the 1.3700 level. There is a possibility that the negative trend will continue and the unit will be susceptible to reviewing the August monthly cycle dips around the 1.3600 rounded levels.
Before the 1.3900 level, the significant barrier is located in the 1.3875-80 region. Bulls will be able to recover the theoretical 1.4000 level with a strong breakthrough of the 1.3950-55 barriers.
In the face of a weaker US dollar, the GBP/USD combination expanded on the previous day’s bullish burst strength past the extremely significant 200-day SMA on Friday. As a result of the surge, the unit reached near four-week highs but fell just before the 1.3900 round-number thresholds. A dismal US monthly jobs data indicated that just $235K, new positions were created in August, extending the previous pattern of the greenback falling. As a result, this was the lowest rise in seven months and came significantly underneath the market’s forecasts of a rating of 750,000. They pushed back estimates for when the Fed would begin reducing its pandemic-era easing, which impacted the dollar.