Pound Technical Outlook: GBP/USD in for Another Bumpy Week
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GBP/USD Technical Highlights:
- Broke uptrend line on big week down
- Has confluent support to watch just below
GBP/USD could be in for another wild one…
GBP/USD took a big hit last week as the possibility of a hard Brexit comes back into the forefront. Price has gone from the highest levels since December to multi-month lows in less than two weeks. The break lower took out the trend-line from the March coronavirus low, with price now testing the June high.
Very near the June high is the 200-day MA at 12734, effectively making the two in confluence. The flat-lined level may act as support in the absence of more overtly negative GBP headlines. It could offer a spot for cable to bounce from, but strength is seen as likely transient.
Momentum at this time is still favorable for more downside, so while a bounce could develop – that may be all it is before taking out more levels. There is another level of support around 12640 to pay attention to, but beyond there price could run lower towards the June low in the 12250s before again finding buyers.
In any event, it will be prudent for traders to keep risk especially tight as headline risk is unusually high.
GBP/USD Daily Chart (support just below)
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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.