04/11/22 Daily Currency Strength Analysis: GBPUSD- Traders To Go long Or Short?

Fri 4th November 2022

Today, Our Daily Currency Strength Weakness Video will focus on:

• GBPUSD
• EURCAD

Charts Provided by Charles Clifton

Daily Analysis By Jon Kibbler

GBPUSD- Traders To Go Long Or Short?

In today’s currency strength video we identified that the GBP is W2 on the trend table and EUR is W3. The USD is S3 on the trend tables and CAD is S2.

The GBPUSD hasn’t featured on the opposite side of the tables for some time now with regards to the trend traders table. In fact at one point from October 3rd they were on the same side of the tables which saw the pair consolidate and move sideways.

However, now they are on opposite side of the table we can look to see if the long term downward trend on GBPUSD  continues. 

In the news recently the Federal Reserve hiked interest rates by 75bps and stated they will be slowing the pace in which they tighten but will hike rates for longer. 

This caused the USD to strengthen which was then followed by a negative Bank of England announcement. 

The BoE hiked interest rates but then talked of the UK being in a two year recession. This information was met negatively by GBP traders seeing sterling weaken across the board.

Technical Observations

• The USD is S3 on the trend table and the GBP is W2 on the trend tables.
• The price has recently rejected the long term trendline and resistance of 1.1600. 
• Sellers pushed price toward the previous lows breaching key levels on the way such as 1.1400.
• If this momentum continues the next support rests at 1.0925. If this fails price could test the extreme lows of 1.0350. 
• The 1.1400 handle could be used as resistance for short traders if the price reaches and rejects it. 
• Breakout traders should watch the H4 price action, if price fails to trade higher we could expect the price to break the lows.