Prone to huge breakouts and dramatic reversals, the pair can move uninterrupted for hundreds of pips, providing multiple opportunities to traders in all time frames.
When the US lowered interest rates, the GBP/USD became a hot carry trade especially when the housing bubble in the UK prompted the Bank of England to raise UK interest rates further. However, this is becoming less the case with every rate hike out of the US making the pair extremely sensitive to any changes in the interest rate outlook for either country.

The following technical analysis gives us a detailed lookout on what is expected to happen to the pair (GBP/USD).

The buying point is at 1.9938; triggered by a strong uptrend and failure to make lower bottom then the previous support of 1.9902. The market is in up trend towards 2.0001

Previous resistance at 1.9965 is the take profit as the first target and the second will be at 2.0001

Fibonacci retracement at 61.8% represents the stop loss at 1.9831

To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of the two moving averages above the zero line and pointing upwards. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI, we can determine that the market is in a bullish direction.

The zero line of the ROC (Rate of Change) is very important to understand the strength of the market and as we see on the graph; it bounce on the zero line and moves upwards. We have another oscillator which gives us the power of the market and is called “Chande Momentum Oscillator” to find the strength we should always look at the -50% line and 50% line; and in this caser it breaks the 50% line and is in an uptrend .The momentum oscillator shows us that the market move upwards with strong power. As we see the Sterling it looks brighter for the next hours.

By Finotec’s professional analyst,
Tony B.

dealingdesk@finotec.com