GBP/USD – Oversold on intraday timeframes

The pair has been offered in Europe and US after UK PM Theresa May said she will invoke article 50 by March 2017. She also said that it could be a hard Brexit – meaning the country would retain the right to determine immigration against access to free markets.

Consequently, Sterling is suffering across the globe. However, the reaction looks slightly irrational as –
• Eurozone would be equally hit if UK loses access to common markets. However, Euro             is somehow resilient that too despite Deutsche Bank concerns.

• Furthermore, PM setting the date for invoking article 50 has taken out uncertainty.

Nevertheless, the currency pair is sliding and clocked a low of 1.2825 levels.

Technicals – oversold on intraday time frames

There is bullish divergence on 15- min charts, while the hourly RSI and 4-hr RSI are oversold.
Hence, the spot could revisit area around 1.2980 levels, which is the falling trend line hurdle on the 15-min chart.

On the lower side, 1.2789 (post Brexit low) is a major support.
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