While Brexit politics and the race for the new prime minister is still likely to have the greatest impact on the Sterling the biggest news for the pair is the meeting of the U.S. to decide and set interest rates, on Wednesday. The Fed is not expected to cut rates at this meeting but there is a high chance that it could hint at a possible cut in the near future. An actual cut or hint of one would weaken the U.S. Dollar.
Technical Analysis: Are we going to break lower or bounce?
4H TF - Williams % R tells us that the price is currently in the oversold zone. GBP/USD is currently travelling near the four-month low price of 1.2559. This together suggests that the price may reverse. To open LONG positions we recommend to wait for the price to break the 9EMA UP.
On the other hand, we have strong downward momentum, daily TF shows us a . If the price breaks and closes below May lows (1.2559) will give way for the price to retest lows in the area of 1.24776-1.24588 that were recorded mid December 2018 and in the beginning of January 2019.
For today we remain neutral, keep track of news coming from the UK and US Fed meeting on Wednesday – the pair looks to have an interesting future.