- 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.
- 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