Two trades to watch: GBP/USD, WTI crude oil
Fiona Cincotta April 6, 2021 2:31 PM
GBP/USD retakes 1.39 as the UK prepares to re-open all shops, hairdressers and outside hospitality next Monday. WTI crude oil has rebounded following 4% selloff in the previous session. API data in focus.
GBP/USD retakes 1.39 as UK set to re-open
GBP/USD is trading mildly higher after UK Prime Minister Boris Johnson announces that the UK will ease lockdown restrictions from Monday 12th April.
An overnight slump in the USD is aiding the pair.
Attention will now shift to US JOLTS in an otherwise quiet day on the economic calendar
Where next for GBP/USD?
GBP/USD trades above the descending trend line dating back to late February and also above the 50 sma.
The pair is trading at the top end of the overnight traded range and has crossed above a key resistance, the 200 sma on the 4-hour chart. It is also testing the upper band of an ascending channel dating back to March 25.
Given an upbeat MACD, a meaningful move above 1.3915 resistance could see the upside extended.
Resistance can be seen at 1.3960 high March 20, ahead of the key 1.40 psychological level.
A pullback below the 200 sma at 1.3895 could see GBP/USD decline towards 1.3814 the confluence of the descending trendline and horizontal support which has been tested a couple of time so far in April.
WTI crude prices rebound ahead of API numbers
Crude oil prices rose as a fall in the value of the US Dollar made oil more attractive.
The pick up in the price of oil comes following a 4.2% decline on Monday on the prospect of 2 million barrels per day supply being returned to the market by July following the OPEC meeting last week.
The easing of lockdown restrictions in the UK will help sentiment towards oil, although rising covid cases in Europe, India and Brazil could limit gains.
API stockpile data is due later today.
Where next for WTI crude oil prices?
WTI trades below its descending trendline dating back to early March. It also trades below its 20 & 50 sma in the 4-hour chart, indicating a bearish trend.
The 20 sma has crossed below the 50 sma in a bearish signal, although the RSI is attempting to move higher but remains in bearish territory.
Immediate support can be seen at 58.60 the overnight low., A move below this level could see the bears attach 57.70 yesterday’s low ahead of 57.20 a multi-month low which has capped losses on March 23.
Any recovery would need to overcome strong resistance around 60.00, the round number and also the approximate location of the 20 & 50 sma. Beyond here the buyers could look to attack the descending trendline resistance at 61.00 to negate the current bearish trend. It would take a move above 62.15 for the buyers to gain momentum.
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