GBP/USD once again trades near 1.2700

Source: Dukascopy Bank SA


The decline of the GBP/UD has reached below the 1.2700 mark. However, it appears that the rate could soon consolidate.

Namely, the traders who shorted the drop from 1.2900 to 1.2670 appear to be taking profits, which is causing a surge. Profits are being taken due to the upcoming US and UK central bank rate announcements. Despite market expectations, the two events are bound to cause volatility. Moreover, surprises are still possible and could cause a technical trader major losses.

A potential surge of the Pound against the US Dollar is set to face resistance in the 1.2720 level and the 50-hour simple moving average. Higher above, note the 100-hour simple moving average and the 1.2740 level. Above these two combinations resistance is expected to be found in the upper trend line of the channel down pattern and the 1.2760/1.2773 range together with the weekly simple pivot point.

In the case of a resumption of the decline, it could be slowed down by the lower trend line of the channel pattern and the weekly S1 and S2 simple pivot points at 1.2683 and 1.2636. Further below, the notable 1.2590/1.2610 range is highly likely going to act as support.
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