GBP/USD – Super Strong Resistance vs Momentum
Pound momentum is so strong that it ignores the International Monetary Fund remarks on the pace of the U.K. economic growth, and diversion in call/put negative option ratio (professional option market participants’ views) which are negative for the Pound now.
Why is that happening?
It is simply because of the continuation of strong mid-term momentum, which has built up alongside the U.S. Dollar weakness.
However, looking at the long-term picture, the Pound is reaching a critical long-term price resistance region. In order to break out further, above the current price levels, it needs another impressively positive catalyst.
My Conclusion
The GBP/USD Major Currency pair should retreat to the 1.35 – 1.37 region in the mid-term time frame.
It is nice to know that
The GBP/USD major currency pair has gained the Forex market nickname “Cable”, named after the Transatlantic Cable laid under the ocean which transmitted the GBP/USD exchange rate between the U.S and U.K in the 1960’s. It refers to the exchange rate of the Great British Pound priced in US Dollars, and/or the Great British Pound (GBP) as a stand-alone currency.
According to the Triennial Central Bank via the Bank of International Settlements, and their foreign exchange survey in April 2016, the global FX markets average turnover stood at $5.1 trillion per day.
The US Dollar is the world’s most traded currency. In 2016, it was on one side of 88% of forex trades, up from 87% in 2013 of the global transactions.
The Pound Sterling market share in 2016 was 12.8% up from 11.8%, which has the number 4 ranking in forex after the Japanese Yen.
The Pound Sterling versus the U.S Dollar, is the third most traded currency pair in the world after the EUR/USD and the USD/JPY, with $470 billion a day in average as of April 2016, reflecting 9.3% of the Over the Counter Forex market turnover by currency pair.
Yaron Mazor is a senior analyst at SuperTraderTV.
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This article was originally posted on FX Empire
