News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/lKvEMf4QRe
  • Weakness in equity markets continued last week as losses built and technical patterns hint further bearishness might be ahead. Get your #equities update from @PeterHanksFX here: https://t.co/GGVrB3r7if https://t.co/HPHUC8EG3o
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/q80wSAoxXP
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/7mc19Gxrvm
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/09/26/Gold-Price-Outlook-Rising-US-Dollar-Sinks-XAUUSD-Will-Losses-Extend.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/gPhy0KoW3W
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/38gTDnpPbn https://t.co/Xtk5g4JQEB
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/3Wked6GBOp https://t.co/SsUguHB39W
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/aD1ZWhTWZp
  • The price of #oil may continue to trade in a narrow range as the rebound from the September low ($36.13) appears to have stalled ahead of the month high ($43.43). Get your #commodities update from @DavidJSong here: https://t.co/719LgjFmYG https://t.co/SSoqjONUzA
  • The Australian Dollar may extend its slide lower despite the planned easing of Covid-19 restrictions, as the market continues to price in an RBA rate cut on October 6. Get your #currencies update from @DanielGMoss here: https://t.co/HJpngnerzY https://t.co/g6X8ABQDwY
GBPUSD Outlook Mired Ahead of Brexit Summit by Bearish RSI Formation

GBPUSD Outlook Mired Ahead of Brexit Summit by Bearish RSI Formation

2019-04-08 16:30:00
David Song, Strategist
Share:

British Pound Talking Points

The British Pound attempts to retrace the decline from the first full-week of April as Prime Minister Theresa May prepares to request an Article 50 extension, but GBP/USD may struggle to hold its ground ahead of the European Union (EU) Summit on Brexit as the bearish momentum appears to be gathering pace.

Image of daily change for major currencies

GBPUSD Outlook Mired Ahead of Brexit Summit by Bearish RSI Formation

Image of daily change for gbpusd rate

GBP/USD holds a narrow range ahead of the EU Summit on April 10 as U.K. lawmakers scramble to avoid a no-deal Brexit, and it remains to be seen if the April 12 deadline will be pushed to June 30 as members of Parliament show little to no interest for a second referendum.

The deadlock in Parliament looks poised to persist as the new bill aimed at avoiding a no-deal Brexit gets held up in the House of Lords, and headlines surrounding the EU Summit is likely to shake up the near-term outlook for the British Pound if European officials struggle to meet on common ground.

Image of DailyFX economic calendar

With that said, data prints coming out of the U.K. may do little to influence GBP/USD as the monthly update to the U.K. Gross Domestic Product (GDP) report is anticipated to show economic activity growing a mere 0.2% in February, but the recent pick up in British Pound volatility appears to be shaking up market participation amid an ongoing shift in retail interest.

Image of IG client sentiment for gbpusd

The IG Client Sentiment Report shows 71.2% of traders are still net-long GBP/USD compared to 68.6% last week, with the ratio of traders long to short at 2.47 to 1. Keep in mind, traders have been net-long since March 26 when GBP/USD traded near 1.3200 handle even though price has moved 1.2% lower since then.

The number of traders net-long is 1.0% higher than yesterday and 19.5% higher from last week, while the number of traders net-short is 18.7% higher than yesterday and 3.5% lower from last week. Market participation appears to be picking up ahead of the EU Summit as net-shorts recover from Friday, but the ongoing pickup in net-long interest suggests the retail crowd is positioning for near-term rebound in GBP/USD as the exchange rate continues to track the range-bound price action carried over from late-February.

However, a further shift in retail interest may warn of a broader change in GBP/USD behavior, with recent developments raising the risk for a further decline in pound-dollar as the exchange rate trades along channel support. Moreover, recent developments in the Relative Strength Index (RSI) suggest the bearish momentum is gathering pace is the oscillator extends the downward trend carried over from the previous month. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups.

GBP/USD Rate Daily Chart

Image of gbpusd daily char
  • The broader outlook for GBP/USD is no longer bullish as both price and the Relative Strength Index (RSI) threaten the upwards trends from late last year, and the advance from the 2019-low (1.2373) may continue to unravel following the string of failed attempts to close above the Fibonacci overlap around 1.3310 (100% expansion) to 1.3370 (78.6% expansion).
  • In turn, the 1.2950 (23.6% retracement) to 1.3000 (61.8% retracement) area remains on the radar, with the next downside region of interest coming in around 1.2880 (50% retracement) to 1.2890 (23.6% expansion).

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES