Pound slides as Brexit concerns quickly resume – GBPUSD forecast

Intermediate
  • A selloff for the Pound over the past 24-48 hours has accelerated through Tuesday with concerns quickly resurfacing regarding Brexit.
  • The euphoric Sterling rally since last week’s strong general election result for the Conservative party and a large government majority has been erased with worries that a no deal Brexit is still a threat.
  • The no deal risk is not seen now in January 2020 at the next Brexit deadline, but rather for the deadline at the end of 2020 to leave the EU.
  • Prime Minister Boris Johnson has indicated he is still willing to leave the EU with no deal and will not extend the deadline beyond the end of 2020.
  • This is in contrast to the view from within the EU, that the end of 2020 deadline is not practical, just from a perspective of time to negotiate and deliver a trade deal.
  • This renewed uncertainty has pushed GBPUSD (Cable) lower and wiped out all the gains since election day last Thursday 12th December, leaving risks for further Cable losses.

GBPUSD technical analysis: Threat flips lower to key 1.3051 and 1.2983

A Tuesday plunge below the next retracement support level at 1.2228, to reject upside forces from the surge late last Thursday (through 1.3500 too 1.3515), to surrender further supports as low as 1.3107/00, switching the threat lower for Wednesday.

  • We see a downside bias for key 1.3051; break here aims for 1.3000 and critical 1.2983, maybe 1.2930/29.
  • But above 1.3174 opens risk up towards 1.3214 and maybe 1.3264.

Intermediate-term outlook

An early December surge through the key 1.3013 peak signalled an intermediate-term bullish shift.

Upside risks: We see an upside risk for and 1.3515, 1.3618 and 1.4000.

What changes this? Below 1.3051 shifts the intermediate-term outlook back to neutral; through 1.2983 is needed for an intermediate-term bear theme

4 hour GBPUSD Chart

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

Comment on this video

Your email address will not be published.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


Latest Related News

Pound stays vulnerable to losses – GBPUSD forecast

The Pound Sterling has been under downside pressures over the past week and in fact since the start of 2020.This has been driven by three factors with respect to the GBPUSD Forex rate:A more dovish tone from at least three members of the Monetary Policy Committee of the Bank of England, including outgoing Governor Carney, with new voices for a possible rate cut being raised… Continued

GBP/USD Selling Breaks Cloud Top Brings 1.2902 Swing Into Focus; Short-Sterling On Verge of Range Resolution

GBP is under broad pressure as dovish weekend comments from Bank of England’s monetary policy committee ratchets rate cut bets. Jan. 31 BoE rate cut odds jump to 50-50 vs. a 0% chance of a move just a week ago. GBP/USD has pierced key support from the Ichimoku Cloud Top and pressures a move to key swing low at 1.2902; below here would bolster negative risks… Continued

Previous signals confirmed with US Dollar strength

US Dollar rotates up (DXY)Euro down (EURUSD)Pound hovers above final short term support (GBPUSD)Major signals in the Japanese Yen (USDJPY bullish) and Canadian Dollar (USDCAD bullish). Continued

GBPUSD forecast remains to the downside

Global financial markets have seen some aggressive swings to tart 2020 with the tension in the Middle East, particular on the individual stock and equity index, alongside the Gold and Oil markets.On the Forex side, however, despite a choppy tone to USDJPY and Japanese Yen cross rates (due to the aforementioned tensions and the Japanese Yen’s position as a safe haven currency), FX markets have… Continued

New Year signals Forex reversals

US Dollar Index (DXY), Euro Dollar (EURUSD), Aussie (AUDUSD) and Pound (GBPUSD) all signal reversalsUptrend ends in the Kiwi (NZDUSD) Continued

Forex Brokers in your location