GBP/USD Forex Technical Analysis for June 22, 2016

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GBP/USD Forex Technical Analysis for June 22, 2016

Forex Technical Analysis – The GBP/USD pair initially rallied during the course of the day on Tuesday, but found the 1.48 level above was resistive enough to turn things back around completely. Because of this, we formed a very negative candle and it looks as if we have finally exhausted the rally that has occurred in this market. After all, the British pound is being moved based upon the latest headlines when it comes down to the EU referendum vote going on in the United Kingdom. That vote comes out today, and I would not be surprise at all to see some of those who were bullish in this market taking profits as not only are we overly exhausted, a “leave” vote could send things to the downside rather rapidly and as a result we could find this market crashing all the way down to the 1.45 handle. Beyond that, we could go much lower and reach towards the bottom of the gap which is the 1.4350 region.

On the other hand, if we break above the 1.48 level that would be very bullish but I think that I would be very hesitant to buy this market unless we had some type of announcement that was very bullish for the British staying within the European Union. After all, it would be very difficult for the market to continue to see bullish pressure without some type of good news, because there so much extreme bullish pressure in this market already, so you have to begin to question whether or not there’s anybody left to buy this pair. In fact, there’s also the possibility that we get a “sell the news” type of situation where we get an initial rally if the British stay within the European Union, only to see the market turn right back around. Ultimately, this is a market that is going to be dangerous and it seems that the Forex brokers around the world agree with me. They are all raising margin levels to take trades in the British pound going forward, as the market could produce fireworks.

In Other View Point – GBP/USD fails once again near 1.4700, Brexit uncertainty weighs

The GBP/USD pair met fresh supply at daily tops on another attempt to regain 1.47 handle, as markets remain uncertain over the outcome of the EU referendum held tomorrow.

GBP/USD awaits Brexit vote

Currently, GBP/USD now climbs +0.20% to 1.4681, struggling to take-out 1.47 handle. The British pound continues to hold gains against its American counterpart in early Europe, although the upside lacks momentum as investors remain nervous heading into the much awaited UK’s vote on the EU referendum, despite the latest opinion poll outcome favouring the Remain camp.

European head of global markets at Bank of Tokyo-Mitsubishi UFJ (BTMU) Derek Halpenny noted, “The opinion polls that had a clear momentum in favor of ‘Leave’ over recent weeks have indicated a shift with weekend opinion polls showing support has shifted back in favor of ‘Remain’.” While the bank sees GBP/USD near $1.3000 level after a one-month period if the ‘Leave’ vote is successful, and close to $1.5000 on ‘Remain’.

Nothing of relevance on the cards this Wednesday, as Brexit related headlines take centrestage.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.4700 (round number), above which 1.4757 (daily R1) would be tested. On the flip side, support is seen at 1.4640 (200-DMA) below that at 1.4598 (5-DMA).

Forex Technical Analysis

In Other View Point – GBP/USD – Bearish pinbar at critical resistance

Resistance – 1.4706, 1.4770-1.4782, 1.48 Support – 1.4642, 1.4616, 1.4540 Pair’s run up to a high of 1.4782 followed by a fall back to below previous high of 1.4770, trend line (black) level and 200 day sma led to formation of bearish pinbar candle on the daily chart. The spot has inched higher in early Europe to trade around 1.4690 and is looking to take out trend line (black) resistance. Pair’s failure to do so if followed by a drop below 200-DMA and a subsequent move below Asian session low of 1.4642 would add credence to bearish pinbar formation and open doors for a drop to major support at 1.4540. On the higher side, a day end closing above 1.48 is required to convince bulls about the sustainability of the current rally.

Forex Technical Analysis

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