- The Pound rallied to a new recovery high late last week after hopes of a Brexit deal were increased by positive comments from the ECs Junker.
- However, these hopes were subsequently dashed by various sources including comments from Ireland that a deal was still a long way off, which has seen the Pound falter back lower against the Euro and US Dollar.
- For GBPUSD, the recent September recovery effort (as the market has moved away from fears of a no deal Brexit) has stalled, with risks now for a correction lower in the very short-term (although the intermediate-term outlook currently remains positive).
GBPUSD: Immediate risk stays lower
A Monday selloff below 1.2438 support to reinforce Friday’s setback from another new recovery high at 1.2582, further easing immediate upside forces and keeping risks lower for Tuesday.
The mid-September probe above 1.2518 set an intermediate-term bull trend
- We see a downside bias for 1.2411 and 1.2391; break here aims maybe towards 1.2331.
- But above 1.2466 opens risk up to 1.2491.
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 1.2208 shifts the intermediate-term outlook back to neutral; through 1.1957 is needed for an intermediate-term bear theme.
4 Hour GBP USD Chart