- Partially a reflection of US Dollar strength, but GBPUSD has broken below a key level at 1.2947, sending a negative, intermediate-term signal from a technical analysis perspective (see below for details).
- Furthermore, this has occurred as the UK Parliament resumes after an Easter recess, with pressures continuing to mount on Prime Minister Theresa May.
- Potential threats from European and local elections, from new political parties and for May from within her own party have set an even more indecisive path ahead as we enter another chapter of the Brexit saga.
- For GBPUSD, the skewed risks are currently to the downside.
GBPUSD intermediate-term bear shift below 1.2947
In our recent reports to clients we have highlighted “a strong risk for an intermediate-term bear shift below 1.2947” and Tuesday’s probe below here sets an intermediate-term Double Top pattern and sees an intermediate-term bear trend.
Furthermore, the surrender of key 1.2947 on Tuesday has reinforced the push late last week below 1.3031/28 supports and the grind lower through the Easter Holiday season, to leave risks lower for Wednesday.
- We see a downside bias for 1.2890; break here aims for 1.2830/25, maybe 1.2771.
- But above 1.2978 opens risk up to 1.3019, maybe 1.3050.
Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2771.
- Lower targets would be 1.2437, 1.2366 and 1.2109
- What Changes This? Above 1.3196 is needed to shift straight to a bull theme.
4 Hour GBPUSD Chart