GBP/USD – fails again at Inv. H&S neckline

GBP/USD rebounded from 1.43 levels post dismal UK retail sales data release and ran into inverse head and shoulder neckline resistance at 1.4395. This was followed by a move higher to 100-DMA level of 1.4438 as expected in the morning write up on GBP/USD

Almost an entire spike has been reversed and the currency pair now trades around 1.4438 levels. The rejection at 100-DMA followed by a failure to sustain above Inv. H&S neckline is a bad news for bulls hoping for an upside break.

Resistance levels – 1.4395-1.4438, 1.45-1.4514

Support levels – 1.4306-1.4297, 1.4252, 1.4223

• GBP’s rejection at 100-DMA coupled with a fall back below Inv. H&S neckline if followed by a daily closing below 1.4350 would open doors for a drop to 1.4252 (50% of 1.4669-1.3835) levels tomorrow.
  

• Note that Friday usually sees profit taking on week long trend. Cable has been on the rise since Monday; hence profit taking may be seen tomorrow.
  

• Still, bullish invalidation is seen only below 50-DMA level of 1.4223.
  

• On the higher side, 1.4395-1.4436 resistance needs to be breached for a sustained rally towards 1.45+ levels.