GBPUSD Technical Analysis 2nd July Update
- Markets responded well to results from the the EU summit and US dollar bears took control. The euro could possibly lead sterling to the upside during this corrective phase.
- When referencing the latest CFTC COT report data we see net short positioning declined to around 760 contracts from the prior 17.2k level.
- Many of the currency majors had rallied into key support/resistance areas so this minor correction, as seen so far this week, is not unusual. The GBP/USD rate is yet to see a move above last weeks high and this is now needed in order to show the positive sentiment has carried over.
- The pound to dollar 4 hour chart below shows price has once again found intra-day resistance at the broken trend line re-test area. If this initial resistance found in the 1.5730 area gives way the 1.5775-1.5800 zone has proved to be noteworthy over recent trading. If this level is overcome it opens up potential for a move to the 1.5900 area.
- Potential resistance areas include the following: 1.5778 swing high from June 20th, 1.5734 daily high from June 21st.
- Potential support areas include the following: 1.5650 London open range low, 1.5572 minor swing low, 1.5500 psychological round number area. 1.5485 last Thursdays low.
- The ECB meeting on Thursday and NFP on Friday are seen as key event risk for this coming week.