We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/EIC9YqfTec
  • Anybody else think that casting directors in movies are some of the most underrated people when it comes to giving a film/series credit?
  • No https://t.co/EoBltaP17k
  • Crude #oilprices may face heightened liquidation pressure as the cycle-sensitive #commodity finds itself under the pressure of resilient resistance and a vulnerable, multi-week rising channel. Get your crude #oil market update from @ZabelinDimitri here: https://t.co/cGPX4qcOH1 https://t.co/0U4JMJVFuf
  • The @ecb will likely boost its Pandemic Emergency Purchase Program at Thursday’s meeting of its Governing Council; a move that could give the #Euro a lift. Get your currencies market update from @MartinSEssex here: https://t.co/I4PbmJNG1z https://t.co/hu6Ld1KdDB
  • $GBPUSD doesn’t have the cleanest set of technical indications, but #USD may give indications if it can break its trading range via the $DXY. Get your currencies market update from @PaulRobinsonFX here: https://t.co/PrC9wAaXvU https://t.co/vHYHflwqR3
  • The ongoing contraction in US production may keep #oilprices afloat in June as crude output falls to its lowest level since October 2018. Get your crude #oil market update from @DavidJSong https://t.co/jj1bMLX0DF https://t.co/O9NOqbfHkb
  • watching the #SpaceX launch🍿
  • Major investment bank models have touted USD selling, given the outperformance in US equities relative to its counterparts over the past month. How is this likely to impact the month-end rebalancing? Find out from @JMcQueenFX here:https://t.co/MtNrHmXZpD https://t.co/d00z4019XE
  • The medium-term #gold outlook still seems favorable as the #Fed, #ECB and more keep rates around 0. Immediate event risk ahead includes the #RBA and #BoC interest rate decisions, US jobs data and Brexit. Get your gold market update from @ddubrovskyFX here: https://t.co/ABXy78LmUn https://t.co/rCALcGaKOL
GBP/USD Technical Analysis: Re-Loading the Brexit Trade

GBP/USD Technical Analysis: Re-Loading the Brexit Trade

2016-03-09 18:42:00
James Stanley, Strategist
Share:

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

In our last article, we looked at a short-side continuation setup off of the psychological level of 1.4000 in GBP/USD; and one target was hit as a new multi-year low was made. A strong reversal hit the stop on the remainder of the position, but it’s likely that this theme in the Sterling isn’t yet over.

It’s amazing the difference a couple of weeks can make in today’s financial markets. Only two weeks ago it seemed as though the Sterling was headed for that 1.0500 all-time low from 1985. But an aggressive rally over the past week and a half have helped to assuage those fears after a near-3% run higher in the British Pound against the US Dollar. This is coupled with a significant move of weakness in the Greenback, so there is a rather obvious culprit for this recent bout of strength in the Cable.

The bigger question is whether that trend is over. I don’t know the answer to that question, and you probably don’t either. But that’s ok; this is where price action comes in, and given the context there could be enough workable ‘clues’ for traders to continue devising strategy. Whether the UK leaves or whether the UK stays, we’re probably in for a few months of volatility before the polls actually open. And as a trader this is what we have to focus on: What is real. And what was definitely real was the panic that led into last week’s move. That panic is probably not done yet as the debate over Brexit will continue to rage-on, and as long as it does, the Sterling will likely remain volatile.

In these situations, about the best thing that a trader can do is look for attractive risk-reward setups in the event that those previously ‘real’ themes come back into the market. Below we’re looking at one such setup in GBP/USD.

The ascension in GBP/USD starting last week set the low on the bear-flag formation shown on the chart below (trend-lines in purple) which had begun to break yesterday. Last night, GBP/USD attempted to bounce off a short-term trend-line (in red), but merely rallied up to a lower-high. This can open the door for short positions in the direction of the previous trend. Traders can look at putting a stop above the previous swing high at 1.4282, but with a 61.8% Fib retracement of the previous major move just 21 pips higher, this may provide a little bit more cushion on the attempted swing lower. A stop at 1.4305 would open the door for targets at 1.4078 (previous swing-low), 1.4000 (major psychological level), 1.3834 (prior price action swing low). If this should come in and should new lows be made, 1.3750 and 1.3500 could come into play as major psychological levels.

GBP/USD Technical Analysis: Re-Loading the Brexit Trade

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES

News & Analysis at your fingertips.