Within the Forex world, nearly all of the major currencies have suffered significant erosion versus the US Dollar since the US presidential election result on Wednesday 9th November.
However, the GB Pound has been on an upward path since late October versus the US currency. Although GBPUSD (Cable) did suffer a minor setback on Wednesday, the push higher again since the US election result underscores a positive correction theme for Cable in the very near term.
Traders should be aware that the GB Pound is certainly bucking the trend of broad US Dollar strength into this week.
Nevertheless, both the aggressive Brexit sell-off and the October 7th “flash crash” leave the longer-term view for Cable as bearish.
Read more real time market views
A push to the topside on Friday through 1.2557 and 1.2615, to build on the Thursday rebound from a mini-base established at 1.2348, to leave risk skewed to the upside into Monday.
However, the 7th October “flash crash” wiped out multi-decade supports, 1.2565 and psychological 1.2000 and reinforced a far more negative intermediate-term outlook.
- We see an upside bias for 1.2674; break here aims for 1.2723, then 1.2789
- But below 1.2524 opens risk down to 1.2375/1.2348.
Short/ Intermediate-term Outlook – Downside Risks:
- We see a negative tone with the bearish threat to 1.1943.
- Below here targets 1.1880, 1.1000 and even the 1985 low at 1.0520.
What Changes This? Above 1.3279 signals a neutral tone, only shifting positive above 1.3445.
Daily GBPUSD Chart