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GBPUSD Testing August 2017 Lows on No-Deal Brexit Fears

GBPUSD Testing August 2017 Lows on No-Deal Brexit Fears

Martin Essex, MSTA, Analyst

GBP price, news and analysis:

  • GBPUSD continues to fall and could yet weaken further.
  • Technically, the August 23/24, 2017 lows at 1.2780 and 1.2774 are now possible targets.

Our trading forecasts for Q3 have been published; you can find the GBP guide here.

No-deal Brexit Fears hit British Pound

Increasing concerns that the UK could leave the EU in March 2019 without a deal are continuing to hit GBP, which is still suffering from comments by UK international trade secretary Liam Fox that the chances of a no-deal Brexit are now “60-40”.

Since the start of this month, GBPUSD has fallen from 1.3117 to below 1.29. Having broken below support from a triangle pattern on the charts, there is now little support for the pair ahead on the lows almost a year ago at 1.2780 and 1.2774. Retail trader sentiment data are also sending out a bearish signal.

GBPUSD Price Chart, Daily Timeframe (July 25, 2017 – August 9, 2018)

Latest GBPUSD price chart.

Chart by IG

Note though that the 14-day relative strength index is now just below the 30 level, suggesting the pair has been oversold and that hedging against a no-deal Brexit is likely to ease off in due course.

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--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

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

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