GBP/USD Outlook Hinges on Break of December Opening Range
GBP/USD trades within the opening range for December as it gives back the advance from the start of the week.
Written by
David Song
Strategist
British Pound Outlook: GBP/USD
GBP/USD trades within the opening range for December as it gives back the advance from the start of the week, but a bear flag formation may unfold as the exchange rate struggles to trade back above the 200-Day SMA (1.2822).
GBP/USD Outlook Hinges on Break of December Opening Range
Keep in mind, GBP/USD pushed below the long-term moving average for the first time since May following the US election, and the exchange rate may no longer reflect the bullish trend from earlier this year amid the flattening slope in the indicator.
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In turn, GBP/USD may give back the advance from the monthly low (1.2617) if it fails to hold within the ascending channel carried over from last month, but the exchange rate may attempt to negate the bear flag formation should it push above the opening range for December.
With that said, GBP/USD may attempt to further retrace the decline following the US election on a move back above the 200-Day SMA (1.2822), but the rebound from the November low (1.2487) may unravel should the exchange rate fail to hold within the opening range for December.
GBP/USD Price Chart –Daily
Chart Prepared by David Song, Strategist; GBP/USD on TradingView
- GBP/USD threatens the ascending channel carried over from last month as it gives back the advance from the start of the week, and failure to hold above the 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) zone may push the exchange rate towards the monthly low (1.2617).
- A break/close below 1.2540 (78.6% Fibonacci retracement) brings the November low (1.2487) on the radar, with the next area of interest coming in around the 1.2390 (38.2% Fibonacci extension) to 1.2446 (May low).
- At the same time, a breach above 1.2820 (38.2% Fibonacci extension) would negate the threat of a bear flag formation, with a break/close above the 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) region opening up 1.3000 (38.2% Fibonacci retracement) to 1.3010 (61.8% Fibonacci extension) zone.
Additional Market Outlooks
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US Dollar Forecast: USD/JPY Rallies Ahead of US CPI Report
EUR/USD Monthly Opening Range Intact Ahead of ECB Rate Decision
USD/CAD Forecast: Canadian Dollar Vulnerable to BoC Rate Cut
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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