FX.co ★ Technical analysis of GBP/USD for October 04, 2022

The GBP/USD pair is trading sharply higher against the U.S. Dollar at the mid-session on the heels of the last month jobs report that missed expectations. The single currency soared, and the greenback weakened after the U.S. Labor Department said non-farm payrolls rose by 1.1337 last month, well short of the 1.1033 estimate.

Moving averages continue to give a very strong buy signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 SMA has extended further above the 100 this week. Support from MAs comes initially from the value area between the 50 and 100 EMAs.

The GBP/USD pair rose to 1.1033 at the start of Sept. 2022 before taking another leg higher to 1.1337. The pair briefly breached parity on 04 October, as markets reacted to US inflation figures.

That was followed by an immediate rebound that sent the GBP/USD pair back above the 1.1214 level. An alternative scenario is fixing above MA 100 H1 (1.1214), followed by growth to 1.1300 (high of the American session).

The GBP/USD pair broke resistance which turned to strong support at the level of 1.1033 yesterday. The level of 1.1033 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered overbought because it is above 50.

The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). Additionally, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100).

For now, outlook will stay bullish as long as 1.13033 resistance turned support holds, even in case of another drop.

This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend.

Buy orders are recommended above the golden ratio 1.1033 with the first target at the level of 1.1459. Furthermore, if the trend is able to breakout through the first resistance level of 1.1459.

We should see the pair climbing towards the double top (1.1459) to test it. The pair will move upwards continuing the development of the bullish trend to the level 1.1500. It might be noted that the level of 1.1500 is a good place to take profit because it will form a new double top in coming hours.