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GBPUSD Back to Post-Brexit Lows


Oct.03.2016

GBPUSD Back to Post-Brexit Lows

GBPUSD back to post-Brexit lows, broke below an important support level, and Invest Divas back to panic mode! What's up and what could we expect next from this naughty pair? Here is a brief technical analysis and market overview for Mr. British Pound and Ms. USA.

GBPUSD back to post Brexit lows - Kiana Danial with Capital index GBPUSD Back to Post-Brexit Lows - British Pound vs. US dollar

 

 

GBPUSD Back to Post-Brexit Lows| Technical Analysis

The GBP/USD pair dropped back to its post-Brexit, all time low level of 1.2830, even though the UK manufacturing PMI came in substantially better than expected.

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This drop could be attributed to USD strength on better than expected US PMI, or overall profit-taking mentality of the market as Brexit timeline narrows down with U.K. Prime Minister Theresa May pledging to invoke Article 50 of the Lisbon treaty by no later than the end of March 2017.

GBPUSD Back to Post-Brexit Lows| Technical Analysis GBPUSD Back to Post-Brexit Lows| Technical Analysis

 

 

This could be yet another test of an important support, leading to formation of a Trip-Top reversal chart pattern. That is of course, in case the market participants are not further panicked on the thought of a Brexit execution, and if UK continues to release awesome economic data.

The good technical news is that the Ichimoku cloud is thinning out and flattening on the daily cart. This indicates a potential of a long-term consolidation while GBPUSD back to post-Brexit lows. The consolidation range is projected to be between 1.2830 and 1.3350

 

Hot Market Moving Events Coming Up...

Tuesday: Coming up on the economic calendar  on Tuesday we have  Reserve Bank of Australia Rate Decision during the Sydney session at 3:30 AM GMT, while China and Israel remain on bank holiday. 

 

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During the London session the UK is expected to released their Construction PMI at 8:30 AM GMT to further shake the GBP crosses. A worse than expected result could push the GBP/USD pair down to new lows.

Wednesday: On Wednesday Australia’s Retail Sales will be out 12:30 AM GMT and UK UK Services PMI will be out during the London session at 8:30 AM GMT. The ISM Non-Manufacutring Composite is scheduled to be out at 2 PM GMT during the New York session, and the combination could create further volatility in the GBP/USD pair.

Trading Strategy - GBPUSD Testing Fibonacci

Bullish Scenario:

Only a break above the Ichimoku cloud would signal a long-term reversal.

Short-term strategy: For now, we need to wait and see if the pair is going to bottom-out once again at 1.2830.

A bullish engulfing patter could be the perfect signal for this short term scenario. Target could be set at the pivot level of 1.3125 or  1.3350 in extension.

 

STEP ONE: You need to first calculate your risk appetite as well as risk tolerance before picking your target.

 

Bearish Scenario: While sentiment remains bearish, it is too soon to tell if GBP/USD is going to create brand new lows or not.

Patience is key.

 

 

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Here are Invest Diva's calculations for important GBP/USD  approximate levels to keep an eye on:

Support Levels Turning Point Resistance Levels
1.2830 1.3350 1.3850
1.3125 1.3630 1.4090

 

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Kiana 喜愛成
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