Sunday, September 23, 2018

GBP/USD - 24 September 2018


Fundamental Highlights

The Pound crashes down as Brexit negotiations collapse. During the Salzburg summit, EU leaders rejected Theresa May's much demanded Chequers Plan enraging May and prompting her to make a bold statement in which she said “ a no deal Brexit is better than a bad deal Brexit”. Going forward, sentiment surrounding the negotiations seem to have shifted completely towards the negative end which will disincentive investors from placing bullish bets on the Pound.

Technical Analysis

With the negative sentiment surrounding the Pound, it will be wiser for investors to search for short opportunities rather than long. With that being said, a break below the 1.30535 support level will expose the next support level at 1.29416. Keep in mind that the pair is currently trading below the 13 and 50-period moving averages signaling short term and medium term bearish momentum. A break below the 200-period moving average (purple) will signal a broader shift in the trend of the pair.

Support: 1.30535 1.29416
Resistance: 1.31400 1.32000

Chart (H4)