GBP Analysis and Talking Points
- GBPUSD| Rangebound as Trend Signals Remain Weak
- EURGBP | Risks Remain Tilted to Further Gains, 0.9000 within Reach
See the DailyFX FX forecast to learn what will drive the currency throughout the quarter.
GBPUSD | Rangebound as Trend Signals Remain Weak
Rangebound trading persists for GBPUSD and likely to continue doing so with trend signals relatively weak. Topside resistance at 1.2784 (61.8% Fib) has continued to cap upside in the pair, while support has stemmed from the rising trendline from the October 2016 flash crash low. As such, until a decisive break is made on either side, the pair is likely to continue trading in sideways fashion. Momentum indicators (DMIs) in the longer term show a bearish bias with the weekly and monthly timeframes tilted to the downside, therefore suggesting that the outlook in the longer term remains soft.
GBPUSD PRICE CHART: Weekly Time Frame (Aug 2016 – Jun 2019)
EURGBP | Risks Remain Tilted to Further Gains, 0.9000 within Reach
EURGBP continues to edge higher and having made a break above the 76.4% Fib level (0.8964) a break of the 0.9000 handle is within reach. Momentum indicators on the daily timeframe continue to point towards further gains, however, for this to be realised in the short term, eyes will be on for a close above the 76.4% Fib level. A break above 0.9000 would see the descending trendline from the 2016 peak come into focus, which is situated at 0.9045-50. On the flipside, failure to extend higher with a rejection ahead of the 0.9000 handle, raises the risk of a pullback towards support at 0.8870.
EURGBP Price Chart: Daily-Time Frame (Nov 2018 – Jun 2019)
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
