GBP/USD

Fuad Karimov's daily comment: GBP/USD — price action review

I posted my GBP/USD review few days ago but the situation with Brexit changes so very fast and price action is so much volatile. So here we are again. Today talks will continue as new

serious hurdles emerge - Spain threatened not to agree to the deal due to Gibraltar issues. Then over the weekend there will be supposedly final talks between May and Juncker in Brussels. Sunday is EU leaders summit and it looks like they would like to seal the deal but anything can happen.

Even if all is fine, the deal is still facing domestic revolt from May’s opponents both from ruling party and opposition.

Price action reflects that uncertainty as we see chaotic moves up and down. This is where the strength of our chart analyses as price inevitably bounces between support and resistance clusters. Once levels are visibly formed, took certain direction then you can rely on probabilities of price behavior.

GBP/USD H4 chart

 

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On H4 chart we see 2 strong downward looking resistance clusters 1.2985 and 1.2900-1.2930. Both are there to contain rallies and that is why I consider the probability of rally is not very high. I believe these resistance are convenient for sell limit orders and all there is to wait for price to approach and orders to be triggered. Most aggressive traders can sell from current levels but mind the risk management and position size and at the same time add to the short position on the above resistance levels.

Below is support 1.2825 and this support will contain selling pressure to some extent. Breaking it below will however reinforce bears.

These are all tactical short-term trades because no meaningful longer-term positions can be predicted at this stage.

Have a great weekend!

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