GBP/USD about to leave the falling wedge
Morning outlook - GBP/USD about to leave the falling wedge
Contrary to expectations, the currency exchange rate did not make any significant moves yesterday and, for this reason, stayed in a falling wedge for additional day. However, the fact that the first four hours of this trading session were dominated by bears suggests that the pair is likely to leave the pattern in the southern direction. Such outcome is supported not only by the weekly S1 located at the 1.3412 level but also by the 55-hour SMA, which is moving precisely along the resistance line of the wedge.
Although the pair might face a strong support in the area between the 1.3350 and 1.3328 marks, from a larger perspective the Greenback should continue to gain value against the Pound. In this sense, the medium-term target for the rate most probably will become an area near the 1.3208 level, which contains the monthly R1 and the weekly S3. In addition to that, it also represents a point, from which the pair started its rapid surge two weeks ago.
Contrary to expectations, the currency exchange rate did not make any significant moves yesterday and, for this reason, stayed in a falling wedge for additional day. However, the fact that the first four hours of this trading session were dominated by bears suggests that the pair is likely to leave the pattern in the southern direction. Such outcome is supported not only by the weekly S1 located at the 1.3412 level but also by the 55-hour SMA, which is moving precisely along the resistance line of the wedge.
Although the pair might face a strong support in the area between the 1.3350 and 1.3328 marks, from a larger perspective the Greenback should continue to gain value against the Pound. In this sense, the medium-term target for the rate most probably will become an area near the 1.3208 level, which contains the monthly R1 and the weekly S3. In addition to that, it also represents a point, from which the pair started its rapid surge two weeks ago.
Comment:
However, there is a need to take into account an effect from the British PM May's speech. If markets will treat it positively, it might create an impulse strong enough to elevate the pair top the top (straight through the above moving averages). If market reaction will be the opposite, her world would only accelerate the fall towards the above-mentioned support levels.
