After experiencing a very deep decline over the past few weeks, the pound seems to be stuck in the consolidation area. GBP is still awaiting political certainty after rumors of May’s resignation intensified. The end of last week until the beginning of this week the GBP / USD movement was limited between the first support and resistance every day (Daily S1-R1). Had strengthened, but GBP was again depressed because the market was still worried about a hard-Brexit. The statement of Prime Minister Theresa May, who said he would resign, further strengthened the position of supporters of Brexit.
Although it seems that Boris Johnson, one of the supporters of the opposition party, has reduced the pressure on his controversial statements regarding Brexit, in fact this is not strong enough to lift the Pound. In addition, the strengthening of the USD amid ongoing negotiations between the Trump Government and Xi is increasingly pressing GBP.
Technical Analysis of GBP / USD
Technically, the actual weakening of the GBP has begun to lose power. GBP has made a number of resistance attempts which eventually led the pair to be in a consolidation phase.
On the H1 timeframe, short and medium moving average lines have managed to break the long MA line. A little pressure at the beginning of the week is not enough to bring the MA line back down.
The signal for the increase in GBP against the USD also began to be seen in the Stochastic Oscillator indicator. Short-term Stoch-Osc indicator lines have begun to move leaving the oversold area.
The price is currently in the range of 23.6% – 76.4% when referring to the Fibonacci retracement indicator. Here we can see that the currency movements are not too strong and are still trying to gather momentum, whether to continue the downtrend or reverse direction.
Daily Trading Forecast
For daily trading, we recommend keeping in mind the latest movements of the GBP / USD pair. The pair, however, is still in a state of uncertainty due to the absence of signs of domestic political certainty. Plus pressure from the USD and market uncertainty about economic conditions after being separated from the Eurozone, it seems that the upward movement is still not strong enough to change the big trend.
Opening a position should not set a profit target that is too large because there is still a possibility that this pair will be depressed again. We recommend that you pay attention to the price position at crucial levels as follows: