- A rebound for the GBPUSD Forex rate this week, but the midweek surge has primarily been driven by broad US Dollar weakness.
- US$ losses have been a reaction to the Fed Meeting on Wednesday (19th June 2019), where the Federal Open Market Committee (FOMC) opened the door to a rate cut, expected in July, with potential for further cuts this year.
- Not only has this seen USD weakness, sending the GBPUSD FX pair higher, but also seen strong rallies in both stock and bond markets globally.
- Despite ongoing concerns about a no deal Brexit, with Boris Johnson forging ahead in the Conservative party leadership content, GBPUSD is aiming higher, towards a key resistance target at 1.2814.
GBPUSD risk flips higher
A strong advance Wednesday through modest resistances level from the past week but to notably probe the redrawn down trend line from early May, to reject bear forces from the recent mid-June down leg extension and shift risks higher Thursday.
The latter April probe below 1.2947 signalled an intermediate-term Double Top pattern and set an intermediate-term bear trend, BUT risk is growing for an intermediate-term shift to neutral above 1.2814.
- We see an upside bias for 1.2708; break here aims for 1.2763 and maybe close to key 1.2814.
- But below 1.2630 opens risk down to 1.2540.
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.
Resistance and Support:
4 Hour Chart