GBP/USD Forex Technical Analysis for June 20, 2016
Forex Technical Analysis – The GBP/USD pair initially fell during the course of the day on Friday, but turned right back around to form a very bullish looking candle. However, there is quite a bit of resistance just above and of course we have the UK voting on the EU referendum in a few days, so at this point in time it’s probably best to leave this particular pair alone. With that, being on the sidelines is probably the only realistic move to have until we get some type of answer to that referendum as it will be so influential.
In Other View Point – GBP/USD – Pick broader ranges
Referendum is just three days away and there is no point in trying to take sides on intraday basis. Instead it would be relatively easier to pick broader ranges in the pair and then go with the flow after breakouts or failed attempts. As of now the broader range on the daily chart is 50-MA (1.4441) and 200-MA (1.4689). On a larger scheme of things, the range could be again 200-MA (1.4689) and rising trend line support at 1.4346. Cable – pick broader range.
In Other View Point – GBP/USD eases to 1.4560, might still be eying 200-DMA
Following an initial up-surge beyond 1.4600 handle on latest UK-EU referendum poll results, the GBP/USD pair is seen trimming some of its gains to currently trade around mid-1.4500s.
Weekly opening trade saw a big price-gap for the British Pound, with the GBP/USD pair soaring past 1.4600 handle after the latest ‘Brexit’ polls conducted by BMG for the Herald, Opinium, YouGov and Survation showed sentiment leaning towards ‘Remain’ camp. The tragic murder of pro-EU MP Jo Cox seems to have strengthened support for the ‘Remain’ camp.
However, following last week’s sharp rebound from the vicinity of 1.4000 handle and a follow through up-move of over 600-pips in just 3-days, traders might be inclined to lighten their positions ahead of the big event risk, scheduled on June 23.
Meanwhile, in absence of any major market moving releases slated for release on Monday, the volatility is likely to remain elevated and the pair is likely to derive its trading moves from the sentiment surrounding the crucial UK-EU referendum.
Technical levels to watch
Weakness below 1.4550 level and a subsequent drop below 1.4530 immediate support seems to drag the pair immediately below 1.4500 handle towards testing 1.4460-50 support area. On the flip side, momentum back above 1.4600 handle is likely to get extended towards the very important 200-day SMA resistance around 1.4690-1.4700 region.