Two trades to watch: GBP/USD, WTI
Fiona Cincotta January 22, 2021 6:57 PM
GBP/USD eases back after weak retail sales data, uptrend remains WTI falls as covid cases in China rise
GBP/USD declines on disappointing retail sales, uptrend remains
GBP/USD is declining towards 1.3650 after disappointing UK retail sales.
GBP/USD technical analysis
After pushing beyond 1.37 overnight GBP/USD is trending lower. The pair trades -0.4% at 1.3665 at the time of writing.
Yet despite today’s pullback, GBP/USD continues to trade above its 20 & 50 sma on the 4 hour chart. Furthermore is remains comfortably within the ascending channel pattern dating back to early October pointing to an established bullish trend.
Immediate horizontal support is being tested at 1.3665a break through here could see 1.36 20 sma and round number tested, prior to 1.3560 lower band of the ascending channel.
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WTI falls as Chinese covid cases rise
Oil prices are trending lower, retreating from an 11 month high struck last week
Fears are growing that new pandemic restrictions in China could curb fuel demand in China, the world’s largest importer.
Recent gains in crude have been under pinned by recovering fuel demand in China, whilst US and Europe lagged. With this source of support potentially waning as covid cases rise and lockdowns are imposed, investors are struggling to see through the near term risks.
WTI has been trending higher making a series of higher highs and higher lows. However after three attempts to break above $53.90, WTI is easing back.
The price has just crossed below the 50 & 20 sma on the 4 hour chart at $52.80 in a bearish signal. The RSI also favours more selling.
A break through support at $51.70 (low 15th Jan) could negate the current uptrend and lead to a deeper sell off to 50.50.
However, should he price retake the 52.80, an attempted rebound could see the 53.90 high retested before $54.75 is targeted.
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