The GBP/USD pair has pulled back from a tough stratum of resistance on a mixture of Brexit fears and poor Manufacturing data.
GBP/USD is trading at 1.2694.
The Pound is rebounding on Thursday despite weak data on the previous day which showed a fall in Manufacturing in October of -0.9% versus the 0.2% expected.
It is pushing back up to the 1.27s where there is robust overhead resistance from the R2 monthly pivot at 1.2775 which is likely to prove a tough barrier to break above.
Also noting the proximity of tough overhead resistance is Lloyds Commercial Banking’s Robin Wilkin.
“We are approaching strong resistance between 1.28 and 1.30. If we are right about a broader medium-term trend developing, this is our main region for a lower high to develop. Momentum studies are also reaching levels that have previously highlighted a top,” he says.
Overall, however, we maintain a bullish bias, and see a break above the 1.2815 level as confirming a clear breach above the R2 pivot, and opening the way to a continuation higher to the next target at 1.2900.
The MACD supports this view as it has broken above the zero line indicating we are in an uptrend on the daily chart.