Forex Technical Update
GBP/USD has been rallying for 2 straight weeks, pushing above the 200-week simple moving average, and is now at an important resistance pivot near 1.63 as the market begins the 4/30-5/4 trading week. This was a resistance pivot back in Oct. 2010 and coincides with a declining trendline that connects the highs from April 2011 and August 2011.
If the GBP/USD does push above 1.63, it opens up the next pivot near 1.66.
Fundamental Risk Factors:
1) This week, we have manufacturing PMI data for the UK coming out on Tuesday, than Construction PMI on Wednesday and Services PMI on Thursday. If these releases for April show that Q2 started with a slow month, the GBP/USD might have trouble pushing across 1.63.
2) The Non-Farm Payroll on Friday is another key risk factor from the USD side.
Another factor is risk sentiment. So ahead of the NFP, GBP/USD to be held below 1.63, we should not see strong risk appetite, the UK PMI releases needs to be disappointing. Looking down from 1.63, two important pivots that use to be resistance are 1.6170 and 1.6070.
If the NFP pushes the market lower, there is also a rising support that could be near 1.60 depending on how the market declines. A break below 1.60 would then start to open up a bearish outlook, with 1.5650 support area as a possible target.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.