Chart of the Week – 6^th October 2022

Weekly Wrap

The S&P 500, Dow Jones and Nasdaq all posted a strong 2-day rally to later drop a little bit in yesterday’s session. S&P 500 is pushing to move upwards of the Descending Channel while trading near the Key Resistance Level at 3778.  The indications are of another push higher going into the end of this week before crucial data on Friday. Tomorrow is a big day with important economic data print coming on the US Jobs report or NFP which gives insights into the health of the US labour market. The NFP data is one of the most market-moving data points for the US Dollar, US equities and Bond and Gold. Gold has also staged a stellar rally in the last week on the back of a weakening dollar and declining yield and is now poised to move into the resistance at $1730 before the NFP data tomorrow.

GBP/USD – After a stellar 11% rally GBP/USD pair facing resistance but is still poised for a further upside breakout.

Chart Analysis:

The GBP/USD chart shows the pair jumped up by about 11% from the record low of 1.03595 on 27th September to touch the peak at 1.4958 in yesterday’s session and dropped back. After 3 days of crossing over, the MACD Line is moving higher from the Signal line and is indicating a persisting Bullish Momentum and providing a confirmation that the rally is not a false move.  After dropping from just under the 50% Fibonacci level on the chart at 1.1495 the pair is having another go at this soft resistance. Their 20-day SMA line is also offering support to the pair while flatting just above the Pivot point on the chart. The 50-Day SMA could become resistance if prices move above 1.1490 to test the key resistance on the chart at 1.1683.

Please check the Chart Trading Insights below

• Resistance Zone: 1.1881 to 1.1965
• Key Resistance Level: 1.1683
• Major Pivot Point: 1.1237
• Key Support Level: 1.0921
• Support Zone: 1.0765 to 1.0686
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• 20 Day SMA – Blue Line

Trade Insights

GBPUSD – Chart shows viable Long Positions above the Major Pivot Point at 1.1237, heading towards the first target of 1.1490 Resistance and then a test of the Key Resistance level at 1.1683 and after consolidation attempt at the Resistance Zone between 1.1881 to 1.1965.

Possible entry of Long Trades above the Major Pivot Point at 1.1237.

Potential First take profit could be at – 1.1490

Potential Second take profit could be at – 1.1683

Potential Third take profit could be at 1.1881

Alternatively, possible Short positions if the pair drops below the Major Pivot at 1.1237 with the target to test the Support at 1.1062 and then the test of Key Support Level at 1.0921.

Possible Entry for Short trades if the pair drops below the Major Pivot Point at 1.1237

Potential First take profit could be at – 1.1062

Potential Second take profit could be at – 1.0921

Potential Third take profit could be at – 1.0765