British Pound Falls From Fibonacci Support As USD Tries To Pick A Direction

In yesterday’s article, we looked at a series of setups around the U.S. Dollar. As we move deeper into the final month of the year, with a Non-Farm Payrolls report on the docket for this Friday and a FOMC rate decision on the calendar for next Wednesday – USD is unlikely to remain here for much longer. But – this does open the door to setups around the U.S. Dollar, such as the prospect of continued strength in GBP/USD or a return to 1.2000 in EUR/USD. Below, we’re going over four current price action setups in major currency pairs.

U.S. Dollar via ‘DXY’ Four-Hour: Dollar Remains Messy, Middle of Recent Bullish Move

British Pound Falls From Fibonacci Support as USD Tries to Pick a Direction

Chart prepared by James Stanley

GBP/USD

In yesterday’s article with resistance coming in just before the mid-line of that channel. But, there’s also support structure, as the 50% retracement of the ‘Brexit move’ in GBP/USD sits at 1.3478, and this is the same price that had offered support in the pair after the bullish breakout in September. After Mark Carney warned that rate hikes were on the horizon, bulls went on a stampede to drive GBP/USD up to fresh yearly highs at 1.3658. But in the wake of that pronouncement, profit-taking pulled prices back to this Fibonacci level where support remained for a week. But as that support was starting to struggle to hold the lows, dovish comments out of the BoE broke that bullish trend, and price action in GBP/USD went right back towards that 1.3000 psychological level.

GBP/USD Four-Hour: 1.3478 Unable to Hold Support After September Breakout

British Pound Falls From Fibonacci Support as USD Tries to Pick a Direction

Chart prepared by James Stanley

When the BoE finally did hike rates in early-November, the British Pound sold-off to find support at the bottom of this bullish channel. That support grinded along the bottom portion of this channel for almost two full weeks until bulls could take control again; and as news that the U.K. and E.U. were getting closer to agreeing on framework for the ‘Brexit bill’, strength continued to drive the pair back towards 1.3500.