Market Overview

GBP/USD Forecast: Cable Break Broader Trendline Heading To $1.3320

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Even with headlines of the UK government getting an agreement with EU over the troubled issue of the Irish border, it was unsustainable for Sterling to hold onto gains against the US Dollar.

Breaking news of the EU officials expressing the doubts about the ability of the UK to finish the trade negotiations before finally exiting EU on March 2019 sterling fell about 170 pips off the peak at $1.3520. A fresh wind of doubts has been added by Brexit Minister Davis who said that Britain’s pledge of maintaining regulatory “alignment” with the EU and the Irish border doesn’t mean that Britain can’t set different rules.

After GBP/USD rallied early morning in Europe to $1.3410, the corrective move higher reversed lower against with GBP/USD finally breaking the broader pitchfork uptrend on the downside.

Technical oscillators like Momentum indicator and Relative Strength Index are pointing lower with 38.2 percent Fibonacci retracement of the upmove on GBP/USD starting in August and peaking in the middle of September standing at $1.3320 is now representing the major support line in Sterling’s move lower. 

On the lower side, near-term support is around $1.3360 that has served previously as a strong resistance supported also by the channel trendline higher. With GBP/USD breaking below $1.3360 the currency pair is seen attacking lower levels of $1.3300-$1.3320. 

GBP/USD 4-hour chart

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Source: FXStreet

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: FXStreetEurozone Forex Markets

 

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