GBPUSD Outlook: Bears are taking a breather before attacking key supports as politics/bearish techs weigh
|GBPUSD
Cable hit new three-week low at 1.2936 in early European trading on Tuesday, in extension of Tuesday's 0.9% fall (the biggest daily loss in October). Politics remain pound's key driver, as reports suggest that Brexit talks stalled, and UK PM May faces strong opposition in her own party over her Brexit plan, which further weakens her position. Pound's strong negative sentiment is reinforced by bearish daily / weekly techs, as daily MA's turned to bearish setup and momentum studies point lower. Monday's close below 55SMA (1.2992) was bearish signal, with long red daily candle also weighing. Bears probed below daily cloud base (1.2944) on Tuesday, with firm break lower to generate negative signal, which would be confirmed by extension and close below pivots at 1.2921 (03/04 Oct lows) and 1.2904 (Fibo 61.8% of 1.2661/1.3297 rally). The action in past week was entrenched within steep bear-channel, which shows intention to extend lower. Sustained break below 1.2904 would also complete failure swing pattern on daily chart, which would trigger fresh weakness and also signal an end of corrective phase from 1.2661 (15 Aug low). Meanwhile, the pair is holding within narrow consolidation in early Tuesday's trading, with oversold slow stochastic warning of stronger correction. Broken 55SMA (1.2992) and daily cloud top (1.3012) mark initial resistances, with extended upticks to be capped by broken 100SMA (1.3080). Only break and close above 10SMA (1.3102) would neutralize bearish bias.
Res: 1.2992; 1.3012; 1.3054; 1.3080
Sup: 1.2936; 1.2921; 1.2904; 1.2811
Interested in GBPUSD technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.