Pound stays vulnerable

  • Indecision around UK politics remains to the fore with more than just confusion regarding the path of Brexit into the end of this month, with the 31st October now looming.
  • The UK political backdrop is very fragile, with outcomes very difficult to predict for the coming days, weeks and months.
  • Our best guess is for a general election, a hung parliament and a coalition government, with Labour and the Liberal Democrats involved.
  • Although this scenario would likely make a no deal/ hard Brexit less likely, it would also been seen as a negative for the economy by financial markets.
  • This current uncertainty keeps Sterling in a vulnerable position, whilst the US Dollar is still favoured as a safe haven in the current climate, which leaves downside risks for GBPUSD.

GBPUSD: Downside risk to key 1.2231

A rebound failure Monday from just above 1.2336 resistance (from 1.2334) to leave a negative tone from last week’s plunge through 1.2391 support to confirm a Head and Shoulders Top pattern, to leave risks lower for Tuesday.

The mid-September probe above 1.2518 set an intermediate-term bull trend

For Today:                                              

  • We see a downside bias for 1.2270; break here aims maybe for key 1.2231 and maybe 1.2208.
  • But above 1.2346 opens risk up to 1.2381.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.2784/1.2814.

  • Higher targets would be 1.3000 and 1.3184.
  • What Changes This? Below 1.2231 shifts the intermediate-term outlook straight to an intermediate-term bear theme.

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

Comments on this analysis

Your email address will not be published.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

Latest Related News

Brexit deal hopes sees GBPUSD break 1.30

The Pound has stayed strong on global Forex markets, despite disappointment at the weekend, with the so called “Super Saturday” not so “Super” as the Government failed to progress its new Brexit deal with the EU.However, the new Brexit deal just seems on course to be pushed through Parliament before the 31st October deadline, whilst the threat of a no deal having been eased as… Continued

Weekly Report / Overview 14th October 2019 – 20th October 2019

USDThe US Dollar continued its decline last week, which has seen a large amount of bullish positions starting to unwind. The Dollar Index (DXY) fell 1.2% to close the week at 97.14. EURThe Euro stayed steady and took advantage of a weaker Dollar, with EUR/USD pushing higher on the week, even though the Eurozone CPI fell to 0.8% YoY, well below the ECB’s 2% target… Continued

MacroWatch A new Brexit deal sends GBPUSD surging close to 1.30

The UK Government last week built on the prior week’s breakthrough with the Irish Government with UK and European Union agreeing a new Brexit deal. The attention turned to the UK Parliament Saturday for a meaningful vote on the new deal, but the Letwin amendment (an insurance policy to ensure that a no deal Brexit did not happen at the end of October) meant that… Continued

The Forex Zone – The Pound (GBP) soars on Brexit deal agreement

A new Brexit deal has seen the GB Pound surge once more against major currencies with GBPUSD nearly hitting 1.30, whilst the US Dollar stays broadly weak. The Forex Zone highlights day trade ideas for the major Forex rates; EURUSD, GBPUSD, USDCAD, AUDUSD, NZDUSD and USDJPY. EURUSD: Intermediate-term bull shift above key 1.1110 (as flagged) The Thursday surge through 1.1110 set an intermediate-term bull trend.… Continued

GBPUSD – GBPJPY Forecast 17 October 2019

Recap GBPUSD we wrote: higher to the next target of 1.2780/90 & above 1.2800 targets minor resistance at 1.2830/40. On further gains look for 1.2860/65... These targets were hit & we topped 10 pips above. GBPJPY bounced 17 pips above strong support at 137.30/20 & shot higher through 138.15, 139.30 & 139.60/70 to top just 19 pips from resistance at 140.25/35. Daily Forecast - 17… Continued

Forex Brokers in your location