GBP/USD Forecast: lacking upward strength

19.05.2014 16:01:39

Despite trading above the daily descendant trend line coming from 1.6975, the GBP/USD lacks upward strength, trading in a   measly 40 pips range since the day started. Heavy data to be release later this week, including inflation, GDP and BoE Minutes, will surely bring more lively movements, yet in the meantime, the pair is quite muted.

Technically, the 4 hours chart shows indicators turning south in positive territory, while 20 SMA converges with 200 one and the broken trend line in the 1.6790 price zone, offering a strong intraday support. Far from signaling a bearish breakout, if the support level gives up the pair may trigger some short term stops and fall down to 1.6740 price zone, while once below this last, the slide can extend down to the 1.6700 figure.

A congestion zone formed by intraday highs and lows stands around 1.6840 immediate resistance level: price needs to accelerate above this last to produce a bullish leg towards 1.6900 figure.