News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
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
Oil - US Crude
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
Wall Street
Bearish
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • US Treasury Yields: 2-Year: 0.147% 3-Year: 0.193% 5-Year: 0.349% 7-Year: 0.577% 10-Year: 0.814% 30-Year: 1.622% $TNX
  • The USD/MXN has broken below a key pivot zone but the follow-though looks a bit tired here. Get your $USDMXN market update from @MBForex here:https://t.co/mCa70wzCfz https://t.co/dyL8MlqXj7
  • RT @DailyFX: Can big tech post another miracle earnings season? Find out from @PeterHanksFX here: https://t.co/8RGba8tB8P https://t.co/tQZQ…
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 1.70% Gold: 0.95% Oil - US Crude: 0.22% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/pdcpeF9zbc
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.61%, while traders in EUR/USD are at opposite extremes with 73.13%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/dqXvVj6gcX
  • Fed Beige Book: - Districts saw modest price increases since last report - Food, autos, and appliances increased significantly in price - Firms continue to take on additional costs related to Covid, including ppe and technology to work from home $SPX $NDX $DXY
  • Fed Beige Book: - Economic output continued to increase across all Fed Districts at a slight to moderate pace - Manufacturing activity increased at a moderate pace in general - Consumer spending growth continues to be positive $DXY
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 0.05% Germany 30: 0.05% France 40: -0.11% FTSE 100: -0.12% Wall Street: -0.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/qRmsVvTyG6
  • Heads Up:🇺🇸 Fed Beige Book due at 18:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-21
  • Senate Democrats have the votes required to block GOP on aid bill $DXY $SPX
GBP/USD Technical Analysis: The British Pound Breakdown

GBP/USD Technical Analysis: The British Pound Breakdown

2016-10-04 18:39:00
James Stanley, Strategist
Share:

Talking points:

  • GBP/USD has staged a large breakdown as a target deadline has been set for triggering Article 50 in order to begin discussions on how to divorce the U.K. from the European Union.
  • Cable gapped-lower to start the week, and the losses haven’t yet stopped.
  • If you’re looking for trading ideas, check out our Trading Guides. They’re free and updated for Q4.

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

In our last article, we looked at the higher-lows that had built in GBP/USD in the post-Brexit environment. And as we had written, the biggest driver to the currency had appeared to be Mr. Mark Carney, Governor of the Bank of England, as each opportunity that he had to speak seemingly entailed a weaker British Pound, driven by even more dovishness from the representing Central Bank.

But over the weekend a fresh development brought upon a big move in GBP-pairs, as British Prime Minister Theresa May indicated that the U.K. will trigger Article 50 by the end of Q1 2017. This brings on the possibility of a ‘Hard Brexit’ scenario that could lead to acrimonious discussions between politicians of both the U.K. and the E.U. as the details of the split are decided upon. If you’d like to read more about this, check out Christopher Vecchio’s article from yesterday in which he discussed this topic at length.

This report over the weekend created a gap on the open in GBP, and the selling hasn’t yet stopped with only brief respites of very short-term support. This means that there aren’t many near-term support or resistance levels, and this makes the prospect of risk management even more daunting given a lack of longer-term or nearby price action swings as fresh 30-year lows continue to print.

This can create a real quagmire of a situation for GBP, as liquidity will likely subdue as a whole series of ‘unknowns’ become the focal point of global markets. And further, for those looking to execute swing or longer-term strategies, price action in the Cable is rather difficult to work with given that we’re currently trading at 30-year lows, and there aren’t many near-by resistance swings that can be used for stop placement.

So for traders executing short-term or momentum strategies, a bearish bias will likely remain attractive in the near-term. Top-side rips higher can be faded as resistance sets in and the prevailing, predominant trend of weakness comes back into the equation; and for swing traders this would likely be the most attractive way of handling GBP in the near-term.

GBP/USD Technical Analysis: The British Pound Breakdown

Chart prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX

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