Pound Technical Outlook: GBP/USD Sell-off Set Up to Continue
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GBP/USD Technical Outlook: Bearish
- Horizontal price action to lead below 200-day
- Only minor support levels until next major level
Horizontal price action to lead below 200-day
Cable lost more ground last week, but to a lesser extent than earlier in the month when Brexit tensions were more intense. Instead of Brexit on its shoulders, a broad dollar rally weighed on GBP/USD. The way the week progressed it looks like another wave of weakness is in the cards.
The back half of last week brought with it sideways price action and an inability to reverse course around the 200-day moving average, suggesting sellers remain in control. Looking lower there are only minor visible support levels in the 12600s, with another right around 12500.
The next significant level of support doesn’t arrive until the swing low from June at 12251, a level that barring significant Brexit developments and/or strong risk-off (USD strength), is unlikely to be seen in the week ahead.
It will take a bit of work to turn the outlook in favor of the long side given the trend off the monthly high. For now, sticking with a bearish bias until price action warrants a flipping of the script.
GBP/USD Daily Chart (looks headed lower)
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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.