- The GBP/USD created a big doji candle on Wednesday, signaling indecision in the marketplace.
- The 100-day MA proved a tough nut to crack on the negative Brexit news.
- The UK retail sales, scheduled for release at 08:30 GMT, could provide a directional bias to GBP/USD.
The GBP/USD pair printed an intraday high and low of 1.3125 and 1.3098 yesterday before closing on a flat note at 1.3144.
Essentially, the currency pair charted a big doji candle, which indicates indecision in the marketplace.
Further, the 100-day moving average (MA) proved a tough nut to crack for the second day as investors offered GBP after leaders of Lithuania and Slovakia and the European Commission President Jean-Claude Juncker informed markets that a Brexit deal was still “far away”.
Looking forward, the rally from the Sept. 5 low of 1.2785 would resume if the pair closes today above 1.3215 (yesterday’s doji candle). On the other hand, a close below yesterday’ low of 1.3098 would validate the bear failure at the 100-day MA hurdle and open the doors for a deeper pullback.
An above-forecast UK retail sales reading could help the GBP secure a bullish close, while a big miss on expectations could prove costly. Moreover, GBP is already on the defensive, courtesy of the negative Brexit newsflow.
At press time, the GBP/USD pair is trading at 1.3150.
GBP/USD Technical Levels
Resistance: 1.3158 (100-day MA), 1.3215 (yesterday’s high), 1.3281 (76.4% Fib R of 1.3472/1.2662)
Support: 1.3133 (5-day MA), 1.3098 (previous day’s low), 1.3075 (200-hour MA)
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