GBP/USD Technical Analysis: November 6, 2017
The pound-dollar pair rallied significantly throughout the week and broke the 1.3250 level above. Howbeit, this region provided plenty of resistance while BOE Governor Mark Carney proposed that the central bank does not have any plans to increase its interest rates sooner or later. Hence, the recent rate hike can be considered singular as the British currency had an extreme roll over to create a shooting star.
The ascending trendline below is expected to offer support and underneath the 1.30 area serves as an essential “floor” in the upward trend. A cut through beneath that mark would likely open doors for good selling opportunities moving forward, otherwise, we could reach the 1.25 level below. It appears that comments of the Bank Governor were highly upsetting more than we can imagine. We could see the effect of Carney’s remarks the following week.
On the other hand, the ability to break over the top of the shooting star would allow the market to drive towards the 1.35 handle, either way, to the 1.3650 region eventually. This is the area where the market had gapped downwards subsequent to the shocking vote to depart from the European Union. This probably prompted a massive bullish indication for the entire currency pairs. Breaking on top of this level would push the market near the 1.50 above, which is a major level included in the longer-term charts.
In any case, the market seems to be going through a significant inflection point. Therefore, longer-term players should watch it play out all throughout the trading week and need to see the weekly close. Basically, a significant move made by the market for this week would show a longer-term trade which is greatly anticipated.