Hello everyone, as we all know the market action discounts everything :)
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GBP/USD failed to break above 1.3500 on Friday. The pair has started the new week on the back foot and it is set to struggle to rebound as Brexit tensions escalate.
This Bearish trend has started back in June where the price change its direction from a Bullish to a Bearish trend and the price dropped from 1.42402 all the way to 1.35778 a 4.6% decrease.
And the latest decisions from the BOE didn't help the British Pound at all where they announced that they wouldn't change the Interest Rate and they kept it at 0.10%.
Possible Scenario for the market :
The market is trading at 1.34926 and started the day with a Bearish candle, it looks like this Bearish momentum is gonna keep going until it hits the support line at 1.33790 and from there we could be seeing a correction in the market that could reach the resistance level at 1.36540 before dropping down again.
There are no signs of a reversal yet, but i will keep you updated if anything happens that could affect the market.
Technical Analysis show :
1) The market is below the 5 10 20 50 100 and 200 MA and EMA (Strong Bearish Sign)
2) The MACD is below the 0 line indicating a Bearish market, With a negative crossover between the MACD line and Signal line.
3) The ADX is at 18 near indicating a near trending market with a negative crossover between the DI+ and DI-.
Daily Support & Resistance points :
support Resistance
1) 1.3481 1) 1.3496
2) 1.3474 2) 1.3501
3) 1.3468 3) 1.3514
Weekly Support & Resistance points :
support Resistance
1) 1.3374 1) 1.3653
2) 1.3260 2) 1.3812
3) 1.3100 3) 1.3932
Fundamental point of view :
In an interview with Bloomberg TV, BoE Governor Andrew Bailey reiterated that it's not their job to steer financial markets on interest rates. Following the BoE's November's decision to leave the policy rate unchanged, the British pound suffered heavy losses against the greenback. Although the CME Group's BoEWatch Tool currently shows that markets are pricing a nearly 70% chance of a 20 basis points rate hike in December, GBP/USD is still having a tough time erasing its losses.
Reescalating Brexit tensions seem to be forcing investors to adopt a cautious stance.
Commenting on reports claiming that the UK could trigger Article 16, Ireland’s Foreign Minister Simon Coveney told RTE News on Sunday that Britain was “deliberately forcing a breakdown” over Brexit's Northern Ireland Protocol. Coveney further added that the EU could suspend the entire Brexit deal in case the UK were to trigger Article 16.
There won't be any high-tier macroeconomic data releases featured in the US economic docket in the remainder of the day. Several FOMC policymakers are scheduled to speak on Monday but their comments are unlikely to be significant enough to alter the Fed's policy outlook.
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.
_________________________________Make sure to Like and Follow if you like the idea_________________________________
GBP/USD failed to break above 1.3500 on Friday. The pair has started the new week on the back foot and it is set to struggle to rebound as Brexit tensions escalate.
This Bearish trend has started back in June where the price change its direction from a Bullish to a Bearish trend and the price dropped from 1.42402 all the way to 1.35778 a 4.6% decrease.
And the latest decisions from the BOE didn't help the British Pound at all where they announced that they wouldn't change the Interest Rate and they kept it at 0.10%.
Possible Scenario for the market :
The market is trading at 1.34926 and started the day with a Bearish candle, it looks like this Bearish momentum is gonna keep going until it hits the support line at 1.33790 and from there we could be seeing a correction in the market that could reach the resistance level at 1.36540 before dropping down again.
There are no signs of a reversal yet, but i will keep you updated if anything happens that could affect the market.
Technical Analysis show :
1) The market is below the 5 10 20 50 100 and 200 MA and EMA (Strong Bearish Sign)
2) The MACD is below the 0 line indicating a Bearish market, With a negative crossover between the MACD line and Signal line.
3) The ADX is at 18 near indicating a near trending market with a negative crossover between the DI+ and DI-.
Daily Support & Resistance points :
support Resistance
1) 1.3481 1) 1.3496
2) 1.3474 2) 1.3501
3) 1.3468 3) 1.3514
Weekly Support & Resistance points :
support Resistance
1) 1.3374 1) 1.3653
2) 1.3260 2) 1.3812
3) 1.3100 3) 1.3932
Fundamental point of view :
In an interview with Bloomberg TV, BoE Governor Andrew Bailey reiterated that it's not their job to steer financial markets on interest rates. Following the BoE's November's decision to leave the policy rate unchanged, the British pound suffered heavy losses against the greenback. Although the CME Group's BoEWatch Tool currently shows that markets are pricing a nearly 70% chance of a 20 basis points rate hike in December, GBP/USD is still having a tough time erasing its losses.
Reescalating Brexit tensions seem to be forcing investors to adopt a cautious stance.
Commenting on reports claiming that the UK could trigger Article 16, Ireland’s Foreign Minister Simon Coveney told RTE News on Sunday that Britain was “deliberately forcing a breakdown” over Brexit's Northern Ireland Protocol. Coveney further added that the EU could suspend the entire Brexit deal in case the UK were to trigger Article 16.
There won't be any high-tier macroeconomic data releases featured in the US economic docket in the remainder of the day. Several FOMC policymakers are scheduled to speak on Monday but their comments are unlikely to be significant enough to alter the Fed's policy outlook.
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
Thank you for reading.