GBP/USD: Post Brexit Rebound at Risk Into Bank of England Meeting
- GBPUSD immediate long-bias at risk into BoE rate decision
- Updated targets & invalidation levels
Chart Created Using TradingView
Technical Outlook: Sterling is trading within the confines of an ascending median-line formation off the lows with the exchange rate turning from the upper parallels today in Europe. Heading into the Bank of England interest rate decision tomorrow, the risk remains for a set-back before moving higher with a general constructive outlook in play while within this formation.
The pair is now testing interim support at 1.3151 with subsequent support objectives at 1.3094 & 1.3036- both areas of interest for possible exhaustion / long-entries. Initial resistance is now eyed at 1.3223 with a breach above the 1.33-handle targeting the 78.6% retracement at 1.3375 & 1.3450. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Deskand take advantage of the DailyFX New Subscriber Discount.
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- A summary of the DailyFX Speculative Sentiment Index (SSI)shows traders are net long GBPUSD- the ratio stands at +1.22(55% of traders are long)-weakbearishreading
- Yesterday the ratio was +1.03. Short positions are 12.9% lower than yesterday but 33.5% above levels seen last week.
- Open interest is 5.1% lower than yesterday and 14.2% above its monthly average.
- The retail crowd has been net-long since the UK referendum on June 23rd with sentiment hitting an extreme of +2.95 following the vote to leave the EU.
- The recent pullback from extremes in sentiment highlight the risk for a larger rebound over the near-term, while the broader outlook remains tilted to the downside as trader remain net long.
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Relevant Data Releases This Week
Other Setups in Play:
- AUD/USD Testing Resistance Ahead of Jobs Report- Key Support 7522
- USD/CAD On the Defensive Ahead of BoC
- NZD/JPY Approaching Brexit High- Constructive Above 74.27
- Webinar: USD Crosses in Focus as Rally Eyes Key Resistance Targets
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---Written by Michael Boutros, Currency Strategist with DailyFX
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