Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
Jan 29 - 05:55 AM

GBP/USD - COMMENT-Sterling's Oct 2023 Low Intact, Flagging A Potential Reversal

By Peter Stoneham  —  Jan 29 - 03:48 AM

(Adds tags)

Jan 29 (Reuters) - Sterling has been in a downward spiral since October 2024 with little sign of a recovery. However, the monthly GBP/USD chart shows the key October 2023 1.2039 low is intact and coupled with a monthly candle signal, warn of a potential reversal. Fundamental factors have weighed on the pound in recent months and a four-month bear trend has breached key technical levels en-route to the January 1 low of 1.2100, a near 10% depreciation.

The 100- and 10-day moving averages gave way at 1.2914 and 1.2813, respectively. This month has seen a drop below the daily Ichimoku kijun line at 1.2620. The daily cloud top at 1.2288 was also broken.

A sterling recovery to 1.2523 on Jan. 27 has, however, given potential for a monthly reversal signal. A hammer candlestick, a bullish warning, has formed and, if GBP/USD closes the month above the 1.2288 cloud top, there could be scope for further gains during February.

A hammer forms when the market has sold off sharply but ends the period near the highs, leaving a long lower shadow. For a hammer to have significance there needs to be a preceding falling trend.

Sterling remains under pressure and the short-term picture could show further weakness, but the longer-term charts could hold hope for the pound.
GBP/USD monthly Ichimoku chart:


(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

Source:
London Stock Exchange Group | Thomson Reuters

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2025 eFXdata · All Rights Reserved
!