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Technical Analysis - Chart of the week

With GBPUSD pair trading above the Major Pivot Point of 138.60 level. Buyers are likely to test the 139 to 140 levels. If key support at 138 is broken, then further losses could be seen towards the 137 to 136 levels. Viable Long Position above 138.60 and if resistance broken at 139 then could see the first test of 140 resistance zone. Otherwise, there could be opportunity for Sellers to Short below 138 to test 137.

GBPUSD

GBP in an uptrend as FOMC Policy Decision is awaited by the investors.    

  • Resistance Zone: 140 to 140.30 
  • Key Resistance Level: 139 
  • Support Zone: 137 to 136.70 
  • Key Support: 138 
  • Major Pivot Point: 138.60 
  • 50 Day SMA – Green Line 
  • 100 Day SMA – Red Line 

Trade Insights – With GBPUSD pair trading above the Major Pivot Point of 138.60 level. Buyers are likely to test the 139 to 140 levels. If key support at 138 is broken, then further losses could be seen towards the 137 to 136 levels. Viable Long Position above 138.60 and if resistance broken at 139 then could see the first test of 140 resistance zone. Otherwise, there could be opportunity for Sellers to Short below 138 to test 137. 

GBP/USD CHART 

Chart Analysis: 

Directional bias: 2 Weeks GBP/USD 

Technical Analysis of GBP/USD daily shows that the pair is in the uptrend since the last week. After touching the high of 139.05 on 12th July, prices declined and touched the 135.70 mark which is also the Support Zone on the above chart. Since then, GBP/USD is in the rebound as USD has weakened a bit. The pair could keep advancing in the next few sessions as it could attempt to break the 139 - Key Resistance level. After zooming into the chart to 4 hourly candles, it shows that the pair has moved above the 50- and 100-day moving averages.  

If GBP/USD pair fails to break through the key resistance on the chart at 139 while monetary policy news by US Fed is awaited. There could be a reversal in the trend and the chart shows the Key support is at 138 and then the next Support Zone is between 137 to 136.70. If even this Support zone is broken, then prices could move towards the 135 mark.      

Fundamental summary: The GBP has been advancing as the Coronavirus case numbers in the UK are on the decline from the past 7 days. The country also reported 131 deaths the highest numbers since March this year. The US Dollar weakens just before the FOMC decision on the Monetary policy on Wednesday this week. The FOMC meets eight times per year to decide the on US monetary policy and to decide the interest rates for the nation. The decision of Fed committee is more important than the change in the interest rates itself by the Fed Reserve as the investors highly anticipate the news and take actions based on it.    

UKO/USD 

Brent Oil needs to breakthrough 74.90 to see further rise.  

  • Resistance Zone: 76.90 to 77.30  
  • Key Resistance: 76.00 
  • Support Zone: 70.70 to 70.20 
  • Key Support: 73.00 
  • Major Pivot Point: 74.90 
  • 50 Day SMA – Green Line 
  • 100 Day SMA – Red Line 

Trade Insights – Analysis of the Brent Oil chart shows that the prices consolidating just below the Major Pivot point at 74.90. Viable Long positions above the Pivot of 74.90 towards first resistance at 76.00 and then 77.30. If the prices reverse below the Pivot, then there are possibilities of short positions towards first 73.00 and then 70.20. 

UKO/USD 

Chart Analysis:   

Directional bias: 2 Weeks UKO/USD 

Brent Oil 4 hourly chart shows that the prices are trying to advance through the Downtrend line touching at 3 peaks points first one at 78.30, second at 77.00 and the third one at our Major Pivot Point of 74.90. SMA Lines of 50 and 100 days crossed each other on 14th July with major fall in the oil prices from the peak of 77.00 towards 67.63. Since then, the prices have bounced back to recover at the current level of 74.70. The 100-day SMA indicates a bullish setup as the 100-day average is trading above the 50-day average and oil prices are sitting above both the moving average lines.  

If the prices move above from here the first resistance at 76.00 is crucial as the prices just went into a downward spiral on 14th July from this important resistance level. If this resistance is broken with strength, then the next zone of resistance is at 76.90 to 77.30. Alternatively, chart shows that the prices must move above the Pivot of 74.90 to rise higher or else there could be decline in the prices towards 73.00 support level and then to 70.20 support zone.  

Fundamental summary: The spread of Delta variant of Corona Virus has created a fear of decline in oil demand as the lockdowns may return. There are speculations that the China’s oil imports can go into a downward trajectory due to high oil prices and local controls on the import quotas abuse. Contrary to this, the Oil production by OPEC+ countries is on the rise however the supply still can’t match the increased demand. There could be price fluctuations in the shorter term and investors need to keep an eye on the Oil inventory data.  

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Disclaimer

The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

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Vishal Rathod

July 29, 2021

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