Technical analysis of GBP/USD for November 05, 2020
The GBP/USD pair gained upside momentum and is trying to settle above the key support level at 1.2931. As the GBP currency is gaining ground against a broad basket of currencies.
The GBP/USD pair is currently trying to settle above the support at 1.2931. If this attempt is successful, the GBP/USD pair will move towards the recent highs near 1.3068 and 1.3176.
The main trend is up according to the daily swing chart. The downtrend turned up when buyers took out the last main top at 1.3068. A trade through 1.3176 will change the main trend top up.
On the upside, however, break of 1.3000 will be the first sign that correction from 1.3068 has completed. Intraday bias will be turned back to the upside for 1.3176 for confirmation.
Nowadays, the U.S. presidential election will remain the key driver for currency markets today. At this point, it looks like the current President Donald Trump and the Republicans in the Senate have not better chances than previously expected. So, any movement or high volatility will be normal.
It should be noted that volatility is very high for that the GBP/USD pair is still trading between 1.2931 and 1.3176 in coming hours.
The GBP/USD pair faced strong resistances at the levels of 1.3068 because support had become resistance last week.
The strong resistance has been already formed at the level of 1.3068 and the pair is likely to try to approach it in order to test it again.
If the pair fails to pass through the level of 1.3068, the market will indicate a bearish opportunity below the new strong resistance level of 1.3176 (the level of 1.3176 coincides with a ratio of 100% Fibonacci).
Moreover, the RSI starts signaling an upward trend, as the trend is still showing strength above the moving average (100) and (50).
Thus, the market is indicating a bullish opportunity above the area of 1.2931 -1.3000 for that it will be good to buy above this spot with the first target of 1.3068. It will also call for an uptrend in order to continue towards 1.3176.
On the other hand, if the GBP/USD pair fails to break through the resistance level of 1.3176 this week, the market will decline further to 1.2931. The pair is expected to drop lower towards at least 1.2931 with a view to test the weekly pivot point. Also, it should be noted that the weekly pivot point will act as minor support today.
The daily strong support is seen at 1.2873. However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.2850.
The material has been provided by InstaForex Company – www.instaforex.com