The Pound Sterling (GBP) pares its losses against the  US Dollar (USD) due to risk aversion dominating the last trading day of 2022. Wall Street extended its losses, while the lack of news kept the GBP/USD within familiar exchange rates. At the time of writing, the GBP/USD is trading at 1.2079 after testing daily lows of 1.2009.

The currency pair is correcting by a Triangle pattern. The pair is going under the Ichimoku Cloud, which indicates prevalence of a downtrend. A test of the lower border of the Cloud is expected at 1.2065, followed by falling to 1.1805. An additional signal confirming the decline will be a bounce off the upper border of the Triangle pattern. The scenario can be cancelled by a breakaway of the upper border of the Cloud and securing above 1.2265, which will mean further growth to 1.2355. The decline can be confirmed by a breakaway of the lower border of the Triangle pattern and securing under 1.1975.

the daily chart depicts the GBP/USD consolidated ahead into the following year. The 200-day Exponential Moving Average (EMA) at 1.2111 is proving difficult resistance to hurdle, while GBP/USD buyers are defending the 1.2000 figure. The Relative Strength Index (RSI) aims higher after crossing the 50 midline, while the Rate of Change (RoC) displays selling pressure waning.

Hence, the GBP/USD is neutral-upward biased, and its first resistance is the 200-day EMA at 1.2111. Break above will expose the December 19 daily high of 1.2242, followed by the 1.2300 figure. As an alternate scenario, the 1.2000 figure is the first defense line for GBP buyers. Once cleared, the next support would be the 50-day EMA at 1.1942, followed by 1.1900.

Ichimoku Cloud directing towards another leg down

Dec 31 2022