Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Chart Of The Day: GBP/USD Looking Increasingly Bullish

By Fawad RazaqzadaForexFeb 18, 2022 07:06
ca.investing.com/analysis/chart-of-the-day-gbpusd-looking-increasingly-bullish-200501127
Chart Of The Day: GBP/USD Looking Increasingly Bullish
By Fawad Razaqzada   |  Feb 18, 2022 07:06
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

This article was written exclusively for Investing.com

The GBP/USD has been creeping higher in recent days, although without making much progress. But is it about to break higher in a more decisive manner?

Although surging inflation in the US has boosted expectations about several Federal Reserve interest rate hikes and the removal of policy accommodation at a faster pace, this has not stopped the greenback from weakening. Indeed, the GBP/USD’s ability to edge higher in the past three weeks despite the increasingly hawkish Fed commentary is in itself a strong signal. What doesn’t break you makes you stronger.

Meanwhile, incoming data from the UK has been stronger, boosting the likelihood for more, aggressive, rate hikes from the Bank of England. This week alone, we have seen UK’s CPI inflation measure climbing to an annual rate of 5.5%, while average earnings have risen to 4.3% in the three months to the end of January compared to a year earlier. On top of this, the latest retail sales data showed a month-over-month print of +1.9% when +1.1% was expected.     

Although we haven’t seen any major technical breakthrough in the GBP/USD, the pressure is building for a bullish breakout. 

The weekly chart shows rates have been rising over the past three weeks, threatening to break out above 1.3700:

GBP/USD Weekly
GBP/USD Weekly

It is also worth pointing out that even after last year’s US dollar rally, the pound’s retreat was very modest, with the cable finding support around the relatively-shallow 38.2% Fibonacci level at 1.3200, which also happened to be the pre-pandemic high. Given these considerations, the GBP/USD is likely to break higher soon.

Zooming into the daily time frame, we can see a couple of tentative bullish signals. These include the bullish trend line and the closing break above 1.3600 resistance, which until Thursday had provided a ceiling on a closing basis. 

GBP/USD Daily
GBP/USD Daily

With 1.3600 reclaimed a bit more decisively now, we are likely to see a move towards 1.3700 next. This is where the 200-day moving average meets the bearish trend line. A bit of profit-taking, should we get there, should be expected. Ultimately, though, the path of least resistance appears to be to the upside. So, I would favor looking to buy dips at support than sell into resistance. 

Chart Of The Day: GBP/USD Looking Increasingly Bullish
 

Related Articles

Shahriar Motevaselolhagh
EUR/USD This Week By Shahriar Motevaselolhagh - May 22, 2022

EURUSD has been bearish for 50 weeks but there are some concerns now. There is a bearish Engulfing pattern in weekly DXY which is below the resistance line so we may see a little...

Chart Of The Day: GBP/USD Looking Increasingly Bullish

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email