GBP/USD attempting a recovery from weekly bearish gap opening

The GBP/USD pair is making an attempt to fill a weekly bearish gap opening and has recovered around 15-20 pips from session low to currently trade around 1.2165 region.

Market expectations of "hard Brexit" have been the sole driver of the pair's downslide since last couple of weeks. Moreover, weekend comments from French President Francois Hollande and German Chancellor Angela Merkel added fuel to Brexit worries. Later during the week, UK inflation data, employment details and monthly retail sales are due for release and would be looked upon for some immediate respite.

Meanwhile, the US Dollar continues to benefit from increasing odds that the Federal Reserve will eventually go ahead and hike interest rates in December, with CME group's FedWatch Tool currently pointing to 64% probability of such an action, and is exerting further selling pressure around the major.

Later during the day, US manufacturing data that include – Empire State Manufacturing Index, Capacity Utilization Rate and Industrial Production, might provide some impetus during NA trading session, while the broader sentiment would continue to be driven by any fresh Brexit related news.

Technical levels to watch

From current levels, momentum above 1.2180-85 immediate resistance could get extended towards 1.2200 handle above which the pair is likely to stage an additional recovery towards 1.2245-50 strong horizontal resistance.

Meanwhile on the downside, sustained weakness below session low support near 1.2150 might now find support at 1.2100 round figure mark, which if broken decisively would turn the pair vulnerable to extend its downward trajectory in the near-term. 

  • 1 Week
  • 1 Month
  • 1 Quarter

1 Week Avg Forecast 1.2164 100.0%28.0%14.0%01020304050607080901000  

  • 14% Bullish
  • 14% Bearish
  • 71% Sideways

Bias Sideways 1 Month Avg Forecast 1.2438 100.0%77.0%54.0%0505560657075808590951000  

  • 54% Bullish
  • 23% Bearish
  • 23% Sideways

Bias Bullish 1 Quarter Avg Forecast 1.2351 100.0%73.0%53.0%0505560657075808590951000  

  • 53% Bullish
  • 20% Bearish
  • 27% Sideways

Bias Bullish

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