GBP/USD – The worm has turned

Ian Coleman FXStreet

There has been no good news for GBP this morning with Brexit negotiations dragging on into this week. There is a glimmer of hope that there may be a deal on the fishing dispute before the end of the day, but I think that will give little respite to the GBPUSD selloff.

This pair has had a ‘double whammy' effect with the USD being bought on the safe haven play with stocks turning lower on Trump's new attack on China.

Let us look at the technical outlook and where we may head.

GBPUSD – This is the main timeframe in this analysis. I have a confluence (perfected) level at 1.3550. We made a 1.3540 high on Friday. This should dictate that we are now in the B-C leg lower.

GBPUSD weekly – The BC leg sometimes extends to 0.886% of the previous leg. This would take us to 1.1645. We should not ignore the previous swing low at 1.1943 (close to the 78.6% fib).

GBPUSD Daily – Morning Doji Star, topping pattern.

GBPUSD four-hour – with the intraday chart getting close to 261.8% extension of 1.3193, selling into rallies may be the ‘call' Resistance zone seen at 1.3400-1.3442.

Author

Ian Coleman

FXStreet

Ian started his financial career at the age of 18 working as a Junior Swiss Broker at Godsell Astley and Pearce (London). He quickly moved through the ranks and was Desk Manager at RP Martins at the age of 29.

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