26 Oct 2024

current;-1.295

target;-28500

sl ;-1.30500

overview

1. The demand for the safe-haven U.S. dollar remained prevalent throughout the week due to various factors, including increased uncertainty surrounding the upcoming U.S. presidential election on November 5, escalating geopolitical tensions in the Middle East, and the global earnings season.

There were no indications of a ceasefire between Israel and Iran, as Israel continued its military actions against the Iran-supported Lebanese militant group Hezbollah in Beirut.

In the meantime, markets began to factor in a greater likelihood of a victory for the Republican candidate, former President Donald Trump, in the presidential election. Trump's trade and expansionary fiscal policies are perceived as inflationary, which may necessitate higher interest rates and bolster the value of the dollar.

GBP/USD: Technical Outlook

The GBP/USD pair battled the 100-day Simple Moving Average (SMA) at 1.2969 as the downtrend extended into the fourth consecutive week.

A weekly closing below that level could provide fresh zest to Pound Sterling sellers.  

The next bearish target is seen at the June 12 high of 1.2861, below which the critical 200-day SMA cap at 1.2803 will be challenged.

If buyers fail to defend that key support, a fresh downside could initiate toward the August 8 low of 1.2665.

The 14-day Relative Strength Index (RSI) holds well below the 50 level, currently near 40, backing the downside bias.

Adding credence to the bearish view, the 21-day SMA crossed the 50-day SMA from above on a daily closing basis on Wednesday, charting out a Bear Cross.

On the flip side, a corrective move higher will need a sustained break above the 1.3000 psychological level, followed by the acceptance above the 21-day SMA at 1.3092.

Further up, the 50-day SMA at 1.3143 could be next on the buyers’ radars.