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Technical Analysis

Pound Looks Past Downgrade

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The British pound has recovered well-above the 1.3500 handle against the U.S dollar, after international credit rating agency Moody's downgraded the United Kingdom's late on Friday, whilst confirming the UK's current outlook.

Following the credit downgrade, the GBPUSD pair fell to 1.3450, but has now recovered nearly 100-pips towards the 1.3550 handle, with the pair now trading above its weekly pivot point, located at 1.3535.

The GBPUSD pair remains bullish in the medium and long-term, but range-bound conditions persist on an intraday basis.

A higher time-frame close below the channel-top at 1.3481 should accelerate GBPUSD selling, whilst a higher time frame price close above the weekly time-frame down-slopping trendline, found at 1.3618, should further encourage GBPUSD buying.

Key intraday technical resistance is found at 1.3553, 1.3568 and 1.3585. Above 1.3585, further intraday resistance is found at 1.3595 and 1.3618.

To the downside, key intraday support is found between the daily and weekly GBPUSD pivot points, at 1.3535-38. Further intraday support comes from the M5 time-frame 200 period moving average, at 1.3517 and the recent swing low, at 1.3497.

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