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July 2019 GBPUSD Market Update and Outlook

Currencies / British Pound Jul 10, 2019 - 06:13 AM GMT

By: Justin_Weinger

Currencies

Since August 2018, Cable had been locked in a big range formed by 1.3280 and 1.2595, but the latest price action development suggests that the major forex pair could be up for a bearish breakout that could send the British currency towards levels not seen since the beginning of January 2017.

With the British Prime Minister Theresa May already announcing her resignation, British politics continue to be a big mess. Doubled by the likelihood of Boris Johnson being the favorite to take her sit, Brexit could turn out to be a more difficult situation to solve than anyone anticipated. Due to the uncertainty, the Bank of England had already signaled there won’t be any new rate hikes, which had been another important drag on the Pound.


GBPUSD technical analysis

As mentioned above, since July 2018 the pair traded in a range, signaling at a particular point that it could start a long bull run, after breaking and holding above the daily 200 simple moving average. Yet, weakness in the pound emerged around our key 1.3280 resistance area and since then the overall price action picture had changed dramatically.

For the past few weeks, buyers had been struggling to keep the price inside the range, even though 1.2595 proved to be a starting point a significant bullish move back in December 2018. Since sellers are putting so much pressure, even though we’re at the bottom of the range, that could signal a downside breakout is about to occur.



If the sellers will clear the January 3rd low, which is also the current 2019 low, that won’t be a very good sign for the rest of the summer. Until we’ll have more clarity on the Brexit situation and how the next PM will handle it, Cable could continue to weaken towards the 1.2000 key support area, which is where the price started to move higher impulsively back in January 2017. With GBPUSD available for trading via a CFD,  we think the likelihood of a downside breakout below the range and a continuation lower is very strong.

Any new significant highlights on Brexit and on the future relationship between the UK and the European bloc could have a meaningful influence on Cable, which means the downside move towards 1.2000 could turn out to be choppy. Despite that, with no clear political direction ahead, traders are most likely to continue to price in uncertainty, which will be negative for the Pound.

By Justin Weinger

The materials contained on this document have been created in cooperation with Vestle UK and should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 59.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. Full disclaimer: https://www.vestle.co.uk/legal/analysis-disclaimer.html

© 2019 Copyright Justin Weinger - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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