Thursday, October 18, 2018

GBP/USD - 19 October 2018


Fundamental Highlights

The Pound continues to fall as Brexit uncertainty fends off investors from the British currency. The European leaders have not been able to reach an agreement yet on the Irish border issue leading to speculation that the Brexit deadline might be extended or else the UK will have to leave the EU with “no deal”. The idea of a deadline extension raises uncertainty in the market which led investors into selling off the Pound. For today, the pair will be driven by any updated developments related to Brexit. Additionally, the pair will also be driven by the greenback as the U.S is set to release its Existing Homes Sales figures.

Technical Analysis

The British Pound breaks below the 200-period moving average and crashes towards the 1.3020 support level. The break below the 200-period moving average signaled a major shift in the trend bias of the pair. Now that the pair is trading below all the three major moving averages, it is safe to say that bearish momentum is strong. Any further negative developments related to Brexit will lead to a break below the 1.3020 support paving the way for a drop towards the 1.2947 level.

Support: 1.3020 1.2947
Resistance: 1.3052 1.3080

Chart (H4)