Pound risk flips higher, for now – GBPUSD forecast

Intermediate
  • A more positive tone for the Pound to start this week, for now rejecting the more negative tone we highlighted in our report here last week.
  • The broader “risk off” theme has eased as global stock indices have rebounded since Friday which has seen a slight weakening of the US Dollar.
  • The Pound also benefited Monday from some positive soundings and hopes regarding the UK trade negations with the EU, which restart this week.
  • Below we again look at the technical analysis foe GBPUSD and the near-term upside risks for today and month-end, though for now the bigger picture threat into October stays bearish.

GBPUSD day trade outlook: Threat shifts higher

A strong recovery Monday to overcome resistance at 1.2805 and 1.2867/71, plus reversing above the September down trend line, to for now reject bear forces from latter September sell-off through various supports (after the earlier September plunge through key 1.2981to shift the intermediate-term outlook to bearish), to keep the risk to the downside Tuesday. 

Day trade setup

  • We see an upside bias for 1.2929 and 1.2967; a break here aims for key 1.3007 and maybe the 1.3035/56 area.
  • But below 1.2822 opens risk down to 1.2762 and possibly 1.2687/75.

GBPUSD intermediate-term outlook

The early September push below 1.2981 signalled an intermediate-term shift to a bear trend.

  • Downside risks: We see an intermediate-term bear trend to aim for 1.2644, 1.2480 and maybe 1.2251.
  • What changes this? Above 1.3007 shifts the intermediate-term bear trend to neutral; through 1.3239 to an intermediate-term bull trend.
6 Hour GBPUSD Chart
6 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

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