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Feb 28 - 06:55 AM

GBP/USD - COMMENT-Cloud Rejections Could Be Significant For Sterling

By Peter Stoneham  —  Feb 28 - 05:00 AM

A swift change of fortunes for sterling following repeated GBP/USD failures at the daily Ichimoku cloud top and the outlook could dim further if this week's U.S. data is stronger than expected.

Technically, a close below the converged 21 and 10-day moving averages, 1.2631-39, could open up the base of the daily cloud, currently at 1.2550.
The 200-day moving average is just ahead of the cloud base at 1.2573 and has supported the pound throughout most of February.

A key 50% Fibonacci retracement level taken off the 1.2536-1.2710 Feb.
14-22 climb is at 1.2623 and the 61.8% level is at 1.2602.

Having been a potential drag on sterling since cable peaked at 1.2710 on Feb.
22 a 1.2649-63 March 11 Ichimoku cloud twist might now slow its decline.
Cloud twists can appear to attract price action.

Tight action continues to pan out sideways just below the top of the weekly Ichimoku cloud, 1.2686, and above the 50-week moving average, 1.2550.
If sterling closes the week above 1.2550 there might be scope for a recovery.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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