GBP/USD: More downside to exploit, Brexit headlines risk

Cycles & Levels: Following the failureto test the weekly range high at 1.3250/60, the pair looks poised to have another go to the bottom of the range at 1.2730. On the daily, the down-cycle is firmly in control with no significant area of support found until the test of the mentioned weekly range low, which reinforces the notion of further sharp falls if Brexit headlines carry more negative news. On the hourly, with the establishment of a new down-cycle now in place, the price has landed to the expected next target of circa 1.2850. There are an additional 140/150 pips of a void area to exploit by momentum players/algos & other types of players amid an absence of clear static areas of support.

Correlations & Volumes: Correlations are moving sharply lower, which adds an insurmountable amount of pressure to an already debilitated Sterling. The close near the lows of the day does not bode well for the interest of bottom pickers. Sellers now have the task of keeping the follow-through selling, which judging by where the POC stands (1.2850), plenty of interest is being accumulated at the present lows for what might be further declines. Remember, Sterling’s performance will be subject to Brexit headlines.