The GBPUSD has rallied (+0.98%) from 1.3604 to 1.3722 to test the 23.6 % Fib retracement level at 1.3725 on the trading session. If the 23.6% level is broken, the next level to watch for is 38.2% (1.3823), then 50% (1.3896) and 61.8% (1.3973).

Market Correlation analysis: The market is in a Risk-on Mode, the Major Indices have rallied and investors sold-off the US dollar, consequently the GBPUSD did rally as the DXY did fall. If the market will continue in a risk-on Mode, the GBPUSD could continue to climb up to the next resistance levels.

Pivot Points on GBPUSD on H1 time frame: The pair has a pivot point at (1.3664) and S1 (1.3624), S2 (1.3564). S3 (1.3526), and R1 (1.3721), R2 (1.3761). R3 (1.3800).

MACD indicator: The indicator has given a buy signal and is showing strong Bullish Momentum bars. MACD reading is Bullish and remains in favor for the bulls at the meantime.

RSI Indicator: The GBPUSD has fallen to 18 level which is Over-sold, the Cable did recover this sell-off and RSI reading is 53.3 which suggests more bullish move is possible.

News to watch for: UK CBI Realized Sales on Wednesday Aug 25th, the USA news Prelim GDP q/q on Thursday, and Core PCE Price Index m/m on Friday and Fed Chair Powell Speech. And Jackson Hole Symposium on Thursday and Friday.

Conclusion: GBPUSD has recovered some of its losses, and in a strong correction at the moment, correction is expected to extend to 38.2% (1.3823) and possible 62.8% (1.3973) level, before we see the down-trend to resume.

GBPUSD rallied +0.98% and remains Bullish

The Federal Reserve on Wednesday held interest rates at near-zero, but hinted that the U.S. economic recovery is getting closer to a place where it may not need as much monetary support.

Source: https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-july-2021-133205460.html

Following the announcement the Dow Jones had been falling since from its peak at 35636 to 34646 (at the time of writing).

FOMC Announcement triggered a risk-off mode and investors sold off the Dow Jones and shares for the safe haven assets Japanese yen, Swiss Franc and US dollar.

The Dow Jones is down 1000 Points (-2.81 %) and further down is possible with strong bearish momentum.

  33746 which worked as a support on 19 July 2021, and if breached the next level would be 

  33045 which supported the US30 on 21 June 2021.

The Dow Jones recovered from 18210 on 23 March 2020 following the crash caused by the Covid-19. The recovery was strong and relatively fast, The Dow broke ATH of 2020 and made a new ATH with 20% up which is 6026 Points.

The weekly candle it is forming now is bearish engulfing and has broken last week low and falling rapidly, this is a correction which can extend further down to 10% from ATH to 33K area.

The price is trading below the 50 and 200 EMAs which work as a resistance at the meantime. The MACD has a sell signal cross, and RSI reading is 26 which is over-sold, however, last correction on 19th of July 2021 the RSI did fall to 18 level.

Concussion: The FOMC triggered a risk-off mode sending the Dow Jones deep down fast, the Indicators are bearish and investors continue to sell. Next support at 33746.

Ahmad Salman

Ahmad Salman

Aug 24 2021

GBPUSD rallied +0.98% and remains Bullish

Ahmad Salman

Aug 19 2021

FOMC triggered a sell-off in the Dow Jones today