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  • Speaking of monetary policy changes, the Brazilian central bank is due to announce its updated policies and the economist consensus is for a 100bp hike to 6.25%. Keep an eye on $USDBRL. Scenario with the most market-moving potential in my book would be a hold and USDBRL rally
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  • Heads Up:🇧🇷 Interest Rate Decision due at 21:00 GMT (15min) Expected: 6.25% Previous: 5.25%
  • The corrective pullback still seems to be in play but the drop below 109.00 has been in the works for too long now, which is a sign of concern for bears. Get your $USDJPY market update from @HathornSabin here:
  • RT @jorgegl2502: esto es nuevo y es importante. es probable que USD empiece a caminar en alza.
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  • Fed's Powell: - Rate liftoff is unlikely to occur before the end of the taper -Tapering will be gradual, and the Fed can accelerate or decelerate the taper if required
Pound Weekly Technical Outlook: GBPUSD Tags Major Trend Support

Pound Weekly Technical Outlook: GBPUSD Tags Major Trend Support

Paul Robinson, Strategist

GBPUSD Technical Outlook:

  • Cable could bounce off 2016-present trend-line
  • At the very least increased volatility looks to be in store

Check out the DailyFX Trading Guides page for intermediate-term forecasts, educational content aimed all experience levels, and more.

GBPUSD could bounce off 2016-present trend-line

Last week brought with it more GBPUSD selling, taking Cable down to an important long-term trend-line. The trend-line began with a bang as it dates back to the October 2016 Sterling flash-crash. This line has another pair of big inflection points with the Jan ’17 and Dec ’18 lows connecting as well.

What makes the line even more solid is that despite it being 2.5 years old, you can connect the lows down to the daily time-frame. There was a brief breach of the line in January when we had another flash-crash situation (YEN, GBP, AUD) but the other lows connect nicely to forge out a strong line of support. It doesn’t mean GBPUSD will bottom, but it does mean traders should be on extra high alert for at the very least increased volatility, if not a big bounce.

If we don’t see a strong turnabout (we got some volatility on Friday) at the trend-line, more probing and a potential break could be in store that leads to the Jan 23 low at 12373. With the right price action, though, a lift off support could quickly see the first swing-level at last week’s high of 12748 hit, followed by the May 21 spike-day high at 12813.

Check out the IG Client Sentiment page to find out how changes in positioning in major markets could signal the next price move.

GBPUSD Daily Chart (Watch price action at major t-line)


GBPUSD Weekly Chart (2016-Present trend-line)


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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at@PaulRobinsonFX

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