GBPUSD stays vulnerable to further weakness

Intermediate
  • Equity market turmoil due to global trade war tensions in early August have had muted impact on the GBPUSD Forex rate.
  • The US Dollar has been slightly weaker across major currencies during the recent market turbulence, but Sterling has been unable to show a decent recovery against the US currency.
  • This reflects ongoing convers regarding the growing prospects of a “no deal” Brexit, with neither the new UK government or the EU backing down or willing to move discussions forward.
  • This leaves GBPUSD susceptible to further losses into mid-August.

GBPUSD unbale to confirm even a small base

A prod higher Tuesday above 1.2186/88 resistances, but then a failure from below the better 1.2250 barrier (from 1.2210) to leave a negative bias to the August consolidation phase and keep risks lower for Wednesday.

The latter April push below 1.2947 signalled an intermediate-term Double Top pattern and set an intermediate-term bear trend.

For Today:                                              

  • We see a downside bias for 1.2114 and 1.2078; break here aims for 1.2055/50 and 1.2012.
  • But above 1.2210 opens risk up to 1.2250, which we would look to try to cap.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2437.

  • Lower targets would be 1.2366 and 1.2109
  • What Changes This? Above 1.2814 shifts the outlook back to neutral; above 1.2916 is needed for a bull theme.
4 Hour GBPUSD Chart 2019-08-07

4 Hour GBPUSD Chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

Comments on this analysis

Your email address will not be published. Required fields are marked *


Latest Related News

Pound upside risks with a weaker US Dollar (GBPUSD Forecast)

The “risk on” phase has extended through late May into this week, with global stock averages surging to new cycle highs.In the Forex world, the US Dollar continues to weaken (alongside the Japanese Yen), seen very much as a safe haven currency in the COVID-19 world.The positive global view continues to be driven by hopes the easing of lockdowns and the reopening of the global… Continued

Pound vulnerability eased as US Dollar weakens (GBPUSD Forecast)

Last week’s “risk on” theme has extended into this week, with many global stock averages surging to new cycle highs, whilst in the Forex space, the US Dollar has weakened, still seen as a safe haven during the current global health crisis.This global positive outlook continues to be driven by hopes of a COVID-19 vaccine, alongside the easing of lockdown restrictions and restarting of the… Continued

Bearish Triangle on USD Index Can Support GBPUSD

Hello traders, USD index is trading sideways for some time now, ideally unfolding an Elliott wave triangle correction in wave B that is part of a three-wave corrective decline. A triangle is a continuation pattern, which has five legs in a sideways range, so breakout is expected to occur lower after A-B-C-D-E sub-waves: ideally into the same direction as previous wave A.  Now we see… Continued

UK Inflation Plunges in April As Covid-19 lockdown Hits Oil Prices

Headline inflation lowest in over three yearsFalling energy and fuel prices account for majority of slumpAnalysts expect UK inflation to approach zero over the summerJob losses to subdue wage inflation for the medium-termGBP drops further on lower-than-forecast CPI London, 20 May 2020 (LS NEWS) – The UK’s main rate of inflation plunged to its lowest level in nearly four years on cheaper fuel and energy… Continued

Pound shows weakness against most cross rates

Pound breaks down with support distant - GBPUSDEuro-Pound breaks up - EURGBPElsewhere Forex markets stay fairly quiet Continued

Forex Brokers in your location