Pound tracks lower on lack of Brexit progress

  • For the Pound, the lack of progress on any Brexit agreement between the governing Conservative party and the opposition Labour party since the Brexit leave date was extended until 31st October 2019, has been disappointing for Forex participants.
  • This has seen Sterling weaken over the past week, erasing prior May gains, which were driven by hopes of a cross party agreement.
  • For the US Dollar, despite a shifting between “risk off” and “risk on” phases over the past 1-2 weeks during the escalation of the US-Sino trade war, the US$ has remained broadly firm against most major currencies, seen as a safe haven (though the Japanese Yen continues to be the short-term, “go to”, flight to quality currency).
  • This has left the US$ generally strong in May with most “risk” currencies weaker (the Australian, New Zealand and US Dollars all lower versus the US currency in May).
  • The overall impact then for the GBPUSD Forex rate has been to eradicate earlier May gains, to reinforce the intermediate-term bear trend from the prior break of key 1.2947, and to leave the immediate risks lower through mid-May.

GBPUSD bear bias intact

A selloff Tuesday through 1.2937 support to reinforce Monday surrender of 1.2966 and Friday’s rebound failure from below our 1.3081 resistance, to keep risks lower for Wednesday.

The latter April probe below 1.2947 signalled an intermediate-term Double Top pattern and set an intermediate-term bear trend, BUT risk is now for a break above 1.3196 for an intermediate-term bull shift.

For Today:                                              

  • We see a downside bias for 1.2897; break here aims for 1.2864, then 1.2830/25.
  • But above 1.2970 aims for 1.3047 and maybe opens risk up towards 1.3081.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2771.

  • Lower targets would be 1.2437, 1.2366 and 1.2109
  • What Changes This? Above 1.3196 is needed to shift straight to a bull theme.

4 Hour GBPUSD Chart


Comments on this analysis

Latest News

Gold Chart
Golden Breakout: Potential for 1,486 for spot gold

We upgrade our neutral conviction on GOLD, mentioned in our prior post, to buy. Yesterday saw a solid 1.3% rise in XAUUSD on the back of a weaker USD, Middle East tensions and Ray Dalio comments. The precious metal broke above key 1,438.63 resistance and a consolidation pattern. A close near the top reinforces bull … Continued

GBPUSD Daily Chart
Elliott wave Analysis: GBPUSD On A Bearish Ride

Hello fellow traders! GBPUSD is looking bearish and can now be unfolding final stages of a sub-wave 3) of blue wave 1. We are observing minor leg 5 of 3) in progress, with possible support, and a turn into a corrective wave 4) around the Fibonacci ratio of 261.8 (1.235/1.223 region). GBPUSD, Daily On the … Continued

Forex News Category
Will Fed Easing Turn Out Like ’95 or ‘07?

You should completely understand that the market is dangerously overvalued and that global economic growth has slowed to a crawl along with S&P 500 earnings. However, you must also be wondering when the massive overhang of unprecedented debt levels, artificial market manipulations, and the anemic economy will finally shock Wall Street to a brutal reality. … Continued

Gold Futures
Gold Getting a Boost as Fed Expresses Concern

As the Fed indicate rate cuts are coming gold will keep rising over the summer  There is a disconnect between asset price inflation and the real economy  Earnings will be flat or disappointing and too much debt has little or negative yield  I last looked at Gold on May 26, 2019 when I called for … Continued

Forex Brokers in your location