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British Pound Price: GBP/USD, GBP/JPY at a Crossroads After Brexit Proposal

British Pound Price: GBP/USD, GBP/JPY at a Crossroads After Brexit Proposal

2019-10-03 09:44:00
Mahmoud Alkudsi, Market Analyst
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GBP/USD and GBP/JPY charts and analysis

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Sterling Pound – Correcting Lower

At the start of the month, GBP/USD corrected lower creating a lower low at 1.2205. Similarly, GBP/JPY traded lower creating a lower high at 133.36.

The Relative Strength Index (RSI) fell crossed below 50 highlighting the end of the uptrend momentum with a possible start of downtrend move.

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GBP/USD DAILY PRICE CHART (Aug 20, 2017 – Oct 03, 2019) Zoomed out

GBPJPY daily chart 03-10-19 Zoomed out

GBP/USD DAILY PRICE CHART (March 10 – Oct 3, 2019) Zoomed IN

GBPUSD daily chart 03-10-19 Zoomed in

Looking at the daily chart, we notice on Sep 25 GBP/USD declined to a lower trading zone 1.2150 -1.2360 eyeing a test of the low end of it. At the start of the month, sellers showed hesitation pulling back above 50-day average.

Hence, any close above the high end of the zone could push GBP/USD towards 1.2550. Although, the daily and weekly resistance underscored on the chart (zoomed in) need to be watched closely. Check the chart to know more about key levels in a further bullish move.

On the other hand, a close below 50-day average would be a bearish signal. Further close below the low end of the zone could see GBPUSD trading towards 1.1800. Nevertheless, the weekly support levels underlined on the chart would be worth monitoring.

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GBP/JPY DAILY PRICE CHART (Jan 4, 2017 – Oct 3, 2019) Zoomed out

GBPJPY daily chart 03-10-19 Zoomed out

GBP/JPY DAILY PRICE CHART (May 24 – Oct 3, 2019) Zoomed in

GBPJPY daily chart 03-10-19 Zoomed in

From the daily chart, we notice on Sep 25 GBP/JPY moved to a lower trading zone, since then the price has been declining towards the low end of current trading zone 130.90 – 133.40 as discussed in our last update.

Thus, if sellers clear the support area (between 50- day Average and 130.84) then any close below 130.84 could press GBPJPY towards the vicinity of 129.00-128.80. That said, sellers should pay a close attention to the weekly support levels marked on the chart (zoomed in).

On the flip-side, any failure in clearing the support area may reveres current direction sending GBPJPY towards the high end of the zone. See the chart to know more about higher trading zone/s with the key levels to consider in a further bullish move.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkudsi

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

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