FX.co ★ Technical analysis of GBP/USD for November 04, 2022

The bullish trend is currently very strong for the GBP/USD pair. As long as the price remains above the support levels of 1.1196 and 1.1282, you could try to take advantage of the bullish rally. Over the past week, the price of the GBP/USD pair has been plummeting with strong bullish momentum, resulting in a break above the 50-day and 100-day moving averages lines on the daily timeframe, indicating that the bulls are presently in control of the market. The USD's strong gains against the US dollar have continued this week ahead of the NFP. The common currency reached a high of more than two week earlier this afternoon GMT at 1.1322.

Signs of progress toward new fiscal stimulus in the USA and the dollar's general weakness have been key factors despite weak economic data affecting both currencies. This technical analysis of the GBP/USD pair looks at the one-hour chart. The resistance of the GBP/USD pair has broken; it turned to support around the price of 1.1282.

Thereby, forming a strong support at 1.1282. The direction of the GBP/USD pair into the close this week is likely to be determined by trader reaction to 1.1282 and 1.1352.

The GBP/USD pair climbed above the level of 1.1282 before it started a downside correction. The GBP/USD pair set above strong support at the level of 1.1282, which coincides with the 38.2% Fibonacci retracement level.

This support has been rejected for three times confirming uptrend veracity. Hence, major support is seen at the level of 1.1196 because the trend is still showing strength above it. Another thought; the Relative Strength Index (RSI) is considered overbought because it is above 60. At the same time, the RSI is still signaling an upward trend, as the trend is still showing strong above the moving average (100), this suggests the pair will probably go up in coming hours.

The first bullish objective is located at 1.1352. The bullish momentum would be revived by a break in this resistance (1.1352). Buyers would then use the next resistance located at 1.1421 as an objective. Crossing it would then enable buyers to target 1.1421. The level of 1.1421 coincides with the golden ratio (61.8% of Fibonacci retracement) which is acting as major support today.

Be careful, given the powerful bullish rally underway, excesses could lead to a short-term rebound. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend.

Accordingly, the market will probably show the signs of a bullish trend. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend In other words, rebuy orders are recommended above 1.1352 level with their third target at the level of 1.1421.

From this point, the pair is likely to begin an ascending movement to the point of 1.1352 and further to the level of 1.1421. The price of 1.1421 will act as a strong resistance and retest the psychological price again.

On the other hand, if a break happens at the support of 1.1196, then this scenario may become invalidated. This content is for information purposes only and in no way constitutes investment advice or any incentive whatsoever to buy or sell financial instruments. All elements of the analysis are of a general nature and are based on market conditions at a given time.

Forecast (GBP/USD) :

The volatility is very high for that the GBP/USD is still moving between 1.1282 and 1.1421 in coming hours. Consequently, the market is likely to show signs of a bullish trend again. Hence, it will be good to buy above the level of 1.1300 with the first target at 1.1352 and further to 1.1421 in order to test the daily resistance. However, if the GBP/USD is able to break out the daily support at 1.1196, the market will rise further to 1.1059 to approach support 2 next week.