GBPUSD May Advance Despite Declines From Mid 1.3700 ‘As Virus Spread Is Reduced’

GBPUSD May Advance Despite Declines From Mid 1.3700 ‘As Virus Spread Is Reduced’

GBPUSD Price Analysis – January 31

The GBPUSD pair exited the prior week with modest gains after it eased from the mid 1.3700 level to close at 1.3705. The coronavirus spread reduction eased the pressure and offered some reprieve to the UK currency which was quite resilient to the dollar’s demand on risk-aversion.

Key Levels
Resistance Levels: 1.4345, 1.4000, 1.3800
Support Levels: 1.3624, 1.3515, 1.3300
GBPUSD Long term Trend: Ranging
GBPUSD eased from its bullish traction around 1.3758 level but is still far from bearish. On the daily chart, the pair continues to advance above the bullish moving average of 13, which provides weak support at 1.3650, while technical indicators such as the RSI are ranging within positive levels.

In a broader context, the target remains at the key round figure of 1.3800. A sustained breakout at this point should also be accompanied by continued trading beyond the upper horizontal line, which is currently at 1.4000. This should confirm the mid-term bottom at 1.1409. Nonetheless, a deviation at 1.3519 would maintain medium-term bearish sentiment for another decline.
GBPUSD Short term Trend: Ranging
In the 4-hour chart, the pair settled within its moving average of 5 and 13 where both are directionless. Technical indicators hover around their midlines, lacking directional strength. Meanwhile, major indicators have lost their directional strength but hold within positive levels.

However, GBPUSD’s rise from 1.3177 continued to 1.3758 in the previous week but retreated. The initial bias is neutral this week. On the other hand, after the 1.3519 resistance turned support level, the pair could target the 1.3300 near term low. A decisive breach of the 1.3800 upper marks would restart the general rally from 1.1409.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.