GBP/USD Forecast: Entering oversold territory after tumbling on no-deal Brexit fears


  • European leaders insist that May must pass the Brexit deal in Parliament for an extension.
  • Fears of a no-deal Brexit rise as the clock ticks down to Brexit.
  • GBP/USD tumbled down, entering the oversold territory.

The European Union Council Summit is in play in Brussels. Entering the gathering, UK PM Theresa May repeated her stance to ask for a short Brexit delay in order to pass the Brexit deal.

However, European leaders say that without an approved accord, there is no rush to approve an extension.

However, time is running out, with eight days until Brexit. Decisions may be taken at the last moment.

Some political analysts say that May may opt for a no-deal Brexit. Fears have brought together labor union TUC with the business lobby CBI. They sent a rare joint letter to May, urging her to refrain from a no-deal Brexit and asked for a meeting with her.

A petition calling the government to revoke Article 50 surpassed one million votes.

However, fears of a no-deal are in play. This is the worst case scenario amid our three options.

Together with a recovery of the US Dollar, GBP/USD tumbled down to 1.3070, the lowest in a week.

GBP/USD Technical Analysis

GBP USD falling March 21 2019

The Relative Strength Index (RSI) on the four-hour chart dropped below 30, indicating oversold conditions. This implies a correction is on the cards.

However, cable dipped below the 200 Simple Moving Average and downside Momentum intensified. 

The next support line is only at 1.3010 which was a swing low last week. 1.2960 is a significant support line. It was a double bottom. Further down, 1.2920 and 1.2850 are eyed.

1.3120 turns into resistance. It provided temporary support early in the day. 1.3180 was a swing low early in the week and 1.3250 was a swing high on Wednesday.

 

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.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD: Bulls await a sustained move beyond previous support

Even after witnessing pullbacks, EUR/USD buyers await a sustained break of previous support-confluence (now resistance) while the quote is on the bids near 1.1224 during early Monday.

EUR/USD News

GBP/USD recovers to 1.2600 as UK politics become clearer

While overall US Dollar (USD) strength continues to dominate market sentiment, the GBP/USD pair recovers to near 1.2600 as an outcome of the UK PM’s race becomes clearer during early Monday.

GBP/USD News

USD/JPY wavers in range near 108.60 amid risk-on

USD/JPY failed to sustain at higher levels once again and returned to the familiar range around 108.60 amid mixed Asian stocks while higher US equity futures and Treasury yields help keep the minor bids intact ahead of Fed.  

USD/JPY News

Trade War With India Starts: How Trump is Winning the Global War in 10 Tweets

After a year of talks on U.S. barriers to Indian steel and aluminum, India retaliates against Trump. The Hindu reports India to Impose Retaliatory Tariffs on 29 U.S. Goods Starting June 16. 

Read more

Gold: 100-month MA is a level to beat for the bulls

Gold (XAU/USD) is struggling to cut through key technical line which proved a tough nut to crack in 2018. The yellow metal rose to $1,358 on Friday, but the break above the 100-month MA.

Gold News

Majors

Cryptocurrencies

Signatures