2022/12/11 (123) Technical Analysis – GBPUSD

For The 1st Time Since 2021/09/10 Whole Trading Days Above 200SMA Again
– That`s Why Bulls Have To Defend The 1.20 GBPUSD Price Action Area!


The 1.20 GBPUSD Are Needs To Be Defeated This Week, If Bulls (Like Us) Want To Trade Higher Prices Into Next Year 2023
– But Before A Detail Technical Analysis Let`s Get A Synthesis Revowe Of The USD & US10Y Incl. Both Stock Markets (In News York And/Or London) Of Last Week

Wall Street closed lower on Friday, with the Dow losing more than 300 points, and both the S&P 500 and the Nasdaq falling 0.7% as investors digested a slew of economic releases and remained concerned about the rate hikes. The producer price index, rose 0.4% in November, while analysts expected a modest 0.2% gain. On the other hand, the University of Michigan’s consumer confidence unexpectedly improved showing a drop in short-term inflation expectations to the lowest level in more than a year. Meanwhile, the Fed is set to raise rates by only 50 bps next week but it may not be possible for the central bank to architect a soft landing and prevent a recession. On the corporate side, DocuSign surged over 15% on better-than-expected quarterly results, while Lululemon tumbled 12% after issuing weak Q4 guidance. For the week, the Dow fell 2.8%, its worst week since September while the S&P 500 was down 3.4%, and the Nasdaq shed 4%.

Equities in London closed virtually flat on Friday, with the benchmark FTSE 100 hovering around the 7,480 mark, as gains in the consumer discretionary and financials sectors offset losses in energy. DS Smith and InterContinental Hotels Group were among the biggest gainers, up roughly 4.7% and 4.1%, respectively. Conversely, Frasers Group added almost 4% to lead the FTSE 100. In a week soft in terms of economic data, sentiment remained dominated by worries about the pace of interest rate rises to combat inflation on a backdrop of slowing growth. Still, signs that China is gradually moving away from its stringent COVID-19 controls, with the government making it easier to travel domestically, keep businesses operating, and allow patients to quarantine at home, offered investors some respite. Given the above, the export-oriented index is down more than 1% this week, posting its first weekly decline in four.

The dollar index gave up early losses to trade around 105 on Friday, after fresh PPI data showed producer prices in the US rose more than expected last month. Although markets already priced in a smaller 50bps rate hike by the Fed next week, expectations around the terminal fed funds rate which currently hovers around 5% could change as inflation remains elevated. Attention now turns to CPI data due next week. So far this month, the green back lost 1% and is down more than 7% from a 20-year peak of 114.1 reached in September, amid prospects that other central banks namely the ECB and the BoE will tighten faster than initially expected while China eased some covid curbs.Very Important Price Action Areas
For The Next Days, Weeks And/Or Months

The GBPUSD exchange rate pair lost just over 36 percent from November 2007 into January 2009 – from 2.1161 GBPUSD until to 1.3504 GBPUSD. And has since traded more or less in a major historical flat trend channel between 1.7043 GBPUSD & 1.3504 GBPUSD. It was only in the year 2016 that the GBPUSD exchange rate pair traded below 1.3504 GBPUSD – but rallied several times back to as highs as 1.40 GBPUSD in 2018 and/or 2021 – before the selling off started since May 2021.

1.2800 4XSetUp @ Target Price

1.2667 05/27/2022 resistance line above
old new historical lows

1.2293 08/01/2022 resistance line around
old new historical lows

1.2156 05/13/2022 support line above
old new historical lows

1.1950 10/07/2016 new historical low 2016

1.1760 07/14/2022 support line around
old new historical lows

1.1414 03/20/2020 new historical low 2020

1.1278 10/24/2022 4XSetUp @ Entry Price

1.1061 10/21/2022 support line under
old new historical lows

1.0924 10/12/2022 support line under
old new historical lows

1.0924 4XSetUp @ Stop Price

1.0354 09/26/2022 new historical low 2022

And it is precisely from this downward trend that the important price action areas mentioned here arise. Of course, we can also go into more detail as far as technical price action areas are concerned, but we do that in each next DEVISE 2 DAY Affiliate Online Newspaper Edition. Because, after the us dollar, in this year 2022, as expected but in retrospect faster and/or much more developed expensively than originally thought, we are trying this 4XSetUp trading capabiliyt with the GBP this time. But always taking into account that the USD is yielding a little, due to the brilliant development – just anbivalent vica versa GBPUSD is recovering! How far? We will experience that!The yield on the US 10-year Treasury note, seen as a proxy for global borrowing costs, rebounded to above 3.5% from the three-month low of 3.4% touched on December 7th after the producer price index print surprised to the upside, raising concerns that consumer inflation could refrain from slowing further. Better than expected ISM services data and a strong jobs report for November also extended leeway for the Federal Reserve to continue raising borrowing costs, supporting worries that interest rates will top at a higher level next year. Still, money markets continue to price an 80% chance that the US central bank will hike rates by a slower 50bps in December. On top of that, some sectors of the US economy, including housing and industry, have been flashing recessionary signs. Meanwhile, the gap between 2 and 10-year bond yields widened to over 80bps, the largest since at least 1981.

In The Medium And Long Term, It Is Important
To Defend The Price Action Zone Between 1.1950 GBPUSD And/Or 1.414 GBPUSD

GBPUSD 1.4114 is a key technical as GBPUSD 1.414 marked the low during the early 2020 Corona virus outbreak. Vice Versa the provisional high at that time in the USD – just as a liquid parking opportunity (due to the shutdown of most economies in our so-called West). Personally, however, I perceive the 1.1950 GBPUSD price action area as even more important. Although I occasionally passionately like to discuss and/or argue about it with other colleagues, technical analysis nerds. And who now seem to be even more gifted Technical Analysts than I – which you’ve picked up most of the 4XSetUps from. But let that go – and come back to the 1.20 GBPUSD. Yes, to GBPUSD 1.20 – as on the one hand it is an important psychological price level. Even if it reads boring and unexciting – I know, for free! But I feel the focus on the 1.20 GBPUSD mark is all the more competent, since the GBPUSD exchange rate pair, in its more than 100-year history, was only traded during the Corona Virus outbreak, and or also during the departure of the last Prime Minister Boris Johnson . As well as rather during the line of succession to the royal family of the United Kingdom. As Queen Elizabeth II passed away on 09/08/2022. And since Charles III, of the House of Windsor, King of the United Kingdom of Great Britain and Northern Ireland and 14 other sovereign states, including their territories and dependent areas, known as the Commonwealth Realms, has been king. He is also head of the 56-state Commonwealth of Nations, liege lord of the British Crown Dependencies, secular head of the Anglican State Church and Commander-in-Chief of the British Armed Forces. So, if you will, a historical exception as far as GBPUSD is concerned around the 1.20 price action area. A historical volatile standard deviation, if you will. Which should sooner or later be found again in its own historical average value. Which in our case is medium term (just since 2017 more or less 1.28 GBPUSD). In the long term even GBPUSD 1,525 (just since the lows of 2008, after the collapse of the Lehman Brothers Bank in the USA and the financing crisis that has followed since).

But To Wrap Up, Let´s Briefly Refocus On What`s Happening Last Week? British Pound Hovers Near Six-Month High!

The British pound was changing hands at $1.22, not far from an almost six-month peak of $1.23 reached earlier this month, buoyed in part by growing confidence that the UK is getting its spending and borrowing fiscal plans align with the reality. At the same time, another key driver for the specular pound’s rebound from September’s record-low of $1.04 was a sharp dollar depreciation amid prospects of a slowdown in the Federal Reserve’s aggressive policy tightening and concerns about the health of the US economy. Still, the outlook for the sterling remains clouded by fears of a domestic recession. BOE Governor Andrew Bailey has been warning markets that tightening expectations is overdone with the nation toppling into a two-year recession. The 1.1950 GBPUSD and/or 1.414 GBPUSD price action zone has been exited for the past two weeks. GBPUSD has almost exclusively traded above 1.20 GBPUSD. And that for the first time since August of this year 2022, before the turbulence on the financial market place in London took its course. Nevertheless, I remain basically this week, relatively modest due to the upcoming monetary policy of the two central banks. And all in all more realistically optimistic that the FED, for better or for worse, more or less, will step on the brakes when it comes to their rate hike cycle. While the BOE, with a difference of more or less 7% – if we calculate inflation minus the interest rate – is still far behind the goal of fighting inflation. How far behind? And how high will interest rates rise in 2023? Of course I don’t know today! But I don’t want to argue (in contrast to the FED) that the BOE won`t have to continue to rise their interest rates more…