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Technical Analysis – Charts of The Week

Trade Insights – GBP/USD – Chart shows viable Short positions below the Key Support Level at 135.75, targeting the Support Zone at 134.70 to 134.40 and the next support at 133.50. Alternatively, Long positions above the Pivot of 136.55 targeting as the ceiling of the parallel downward channel is broken to first test the Key Resistance level at 137.35 and after consolidation the next resistance zone at 138.40 to 138.60.

GBP/USD

  • Resistance Zone: 138.40 to 138.60
  • Key Resistance Level: 137.35
  • Major Pivot Point: 136.55
  • Key Support Level: 135.75
  • Support Zone: 134.70 to 134.40
  • Last Analysis Date: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – GBP/USD – Chart shows viable Short positions below the Key Support Level at 135.75, targeting the Support Zone at 134.70 to 134.40 and the next support at 133.50.

Alternatively, Long positions above the Pivot of 136.55 targeting as the ceiling of the parallel downward channel is broken to first test the Key Resistance level at 137.35 and after consolidation the next resistance zone at 138.40 to 138.60.

GBP/USD Daily Chart

Chart Analysis:

Directional bias: 2 Weeks GBP/USD

The chart shows that the GBP/USD pair is trading in the downward parallel channel. Indicating bearish bias of the market and downtrend started in June this year. Prices are dropping since our last analysis on 5th September and seemingly have bottomed at the Support zone on the chart at 134.70 to 134.40. This is also the support limit of the channel.

At the time of the analysis, the pair is trading just above the Key support level and apparently consolidating while the investors decide the direction. If the pair doesn’t produce a daily candle above the major Pivot of 136.55 the direction is bearish.

The pair is trading below the 50-Day EMA and the 200-day EMA lines indicating there is a Bearish Bias of the Market. The prices are just above the 135.75 support level and if this level is broken then the prices can quickly slide to test the next support cluster at 134.70 to 134.40.

Moving forward, if the upper limit of the Parallel channel on the chart is broken then we might see a harder push by the buyer to test the key resistance level at 137.35 and then after consolidation the test of the resistance zone at 138.40 to 138.60.

Fundamental Overview: GBP is holding the ground, just above the support level as the Bank of England is to increase the UK Bank rate by 15 basis points to 0.25% later this year as the UK inflation pressure is increasing. UK's latest jobs report also showed that the unemployment rates are falling and rising bond yields in the longer term are broadly positive fundamental indicators for the GBP.

UKO/USD

  • Resistance Zone: 85.00 to 84.50
  • Major Pivot Point: 80.45
  • Key Support: 77.55
  • Support Zone: 73.70 to 72.90
  • Last Analysis Date: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – The UKO/USD or Brent Crude Chart shows Viable Short positions as the Oil has hit the ceiling and the long-term resistance at 85.00. The target for the Short positions could be the Pivot at 80.45 and once this is broken then the Key support at 77.55.

Alternatively, Long Position if prices are moved above the 85.00 Resistance zone with a strong daily candle.

UKO/USD Daily Chart

Chart Analysis: 

Directional bias: 2 Week UKO/USD

Since our last analysis, the UKO/USD pair has continued its upward rally to touch the 85 levels and at the time of analysis, the pair is just trading under the Resistance Zone of 85.00 to 84.50. The oil prices are up by more than 60% this year as it has broken several key resistance levels in the past few weeks. However, at this stage, it seems the rally is losing its strength and Bears might take control of the situation.

The pair is trading just above the overbought 70 levels of RSI for a week now, indicating the prices could drop from here. If Oil prices drop then the first support is at the Pivot of 80.45. After this support is broken then the Oil can drop to the Key Support level at 77.55.

Oil is been trading above the 200 day EMA and the 50 Day EMA levels indicating a strong uptrend.

Fundamental Overview: One of the reasons the Oil has been rallying hard is the tighter supply outlook among traders and demand-side pressures. Natural Gas prices that have skyrocketed has also fuelled the oil prices higher as it might push oil as an alternate fuel-burning source for energy plants in Asia. Traders are focused on the inventory data as last week OPEC+ decided to only increase the production by an additional 400K barrels per day.

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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.

Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.

Vishal R

October 14, 2021

  • Reading time: 6 mins
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