Pound tracks lower on lack of Brexit progress

Intermediate
  • 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

gbpusd

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Your email address will not be published.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