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

Steve Miley

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

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