GBP/USD Post-Brexit Rebound Eyes July High Ahead of UK CPI
- GBPUSD holds constructive formation into UK inflation report
- Updated targets & invalidation levels
Chart Created Using TradingView
Technical Outlook: Sterling is trading within the confines of a well-defined ascending median-line formation off the post-Brexit lows with the pair rebounding off the lower parallel on Friday. We covered this setup at length in today’s scalp webinar (36th min). Heading into the U.K. Consumer Price Index (CPI) release tomorrow, the pair remains constructive while within this formation with a breach higher eyeing topside resistance targets at 1.3347 and the median-line / 76.4% retracement at ~1.34.
Interim support rests with the lower parallel backed by the weekly open / 50% retracement at 1.3165/82. A break below 1.3090 would be needed to shift the broader focus back to the short-side for the pound. From a trading standpoint, I would be looking to buy weakness on the back of the release with a pullback into structural support to offer long-triggers. 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 +1.23(55% of traders are long)- weak bearishreading
- Yesterday the ratio was +1.39. Short positions are 31.7% higher than yesterday and 11.4% above levels seen last week.
- Open interest is 23.0% higher than yesterday and 9.6% above its monthly average.
- Although a net-long reading suggests the broader trend remains weighted to the downside, the recent increase in short-positions on building open interest suggests the near-term risk remains for a move higher before a more dramatic turn.
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Relevant Data Releases This Week
Other Setups in Play:
- Webinar: USDOLLAR Threatens Breakout- Here are the Crosses to Watch
- USD/CHF Back Into the July Open- Bulls Look to U.S. CPI for Fuel
- GBP/USD: Post Brexit Rebound at Risk Into Bank of England Meeting
- AUD/USD Testing Resistance Ahead of Jobs Report- Key Support 7522
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---Written by Michael Boutros, Currency Strategist with DailyFX
Join Michael for Live Scalping Webinars on Mondays on DailyFX and Tuesday, Wednesday & Thursday’s on SB Trade Desk at 12:30 GMT (8:30ET)
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.