GBPUSD trades within narrow price range: A Breakout expected?

Yesterday, GBPUSD continued its sideways movement, but in the evening GBP got a small gain which stopped at 1.3020.  Currently, GBPUSD trades within narrow price range. Can we expect a breakout soon?

28 September, AtoZForex - On Tuesday, GBPUSD demonstrated positive dynamics. The main reason for this development was the post-referendum period in the UK, as many economic indicators turned out better than expected. After the Brexit referendum, the fundamental expectations from the United Kingdom, as a rule, were disappointing. Nevertheless, the actual figures were most of the time positive, which led to the positive dynamics of the pound. Alongside, the expectations of the retail sales in September boosted the British currency as well.

Despite, the positive dynamics, the mood for the British currency remains bearish due to prevailing concerns of Brexit consequences with investors worrying about the growth of the UK. Furthermore, the day before we saw the price decline in the energy market, an especially sharp slump of oil price after comments from Saudi Arabia's Minister of Energy. Mr. Khalid A. Al-Falih emphasized that the OPEC meeting participants couldn't agree on the reduction of oil production levels. As crude oil and the US dollar are negatively correlated, the American currency got additional support from the oil price drop.
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GBPUSD trades within narrow price range

 GBPUSD 4H chart 28 september.jpg GBPUSD 4H chart (Click to zoom in)

See also: What is the next move for EURUSD? Post USD recovery

  • According to moving average based GBPUSD technical analysis, we can conclude the bears dominate here, as the pair is trading below the 50, 100 and 200 Simple Moving averages.
  • The RSI is in the neutral zone and does not deliver any clear signal.
  • Stochastic Oscillator is in the neutral zone and generates a sell signal, as the% K line falls below the% D.
  • The MACD histogram is still in the negative zone, but slightly above its signal line but does not show any clear signal.

The pair is trading within narrow price range, between 1.3120 and 1.2915. Actually, the bearish character prevails here and our main indicators confirm our assumption. Nevertheless, we believe that there will be breakout of this price range soon, which will lead to the direction of GBPUSD.

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