GBP/USD plunges amid Brexit news
Due to existence of a strong selling pressure in the area between 1.3440 and 1.3450 marks, the cable could not climb higher and was forced to make a rebound. However, as this turnaround matched with news coming from Brussels, the Pound lost more than 100-pips against the Dollar and ended the week at the psychological 1.3300 support level. Today the pair is expected to resume the upward movement, even though it is unlikely to exceed the 1.3380 mark, as this area is reliably secured by the weekly and monthly PP as well as the slipping 55-, 100- and 200-hour SMA. In other words, without another fundamental impulse the pair will be forced to retreat once again. In larger perspective it looks like the Friday’s plunge led to transformation of a medium descending channel into the falling wedge formation.
Due to existence of a strong selling pressure in the area between 1.3440 and 1.3450 marks, the cable could not climb higher and was forced to make a rebound. However, as this turnaround matched with news coming from Brussels, the Pound lost more than 100-pips against the Dollar and ended the week at the psychological 1.3300 support level. Today the pair is expected to resume the upward movement, even though it is unlikely to exceed the 1.3380 mark, as this area is reliably secured by the weekly and monthly PP as well as the slipping 55-, 100- and 200-hour SMA. In other words, without another fundamental impulse the pair will be forced to retreat once again. In larger perspective it looks like the Friday’s plunge led to transformation of a medium descending channel into the falling wedge formation.
In first half of the previous trading session the currency pair struggled to bypass a combination of the weekly and monthly PP as well as the 55-, 100- and 200-hour SMAs, as expected. Nevertheless, the overall depreciation of the Dollar allowed the cable to surge to the 1.3420 mark and only then make a rebound.
As the above yesterday’s resistance has turned to support, the rate most probably will resume the surge, trying to properly reach an alleged upper trend-line of a senior falling wedge formation. However, the upcoming vote on tax reform is likely to alter this scenario and push the Dollar back to 1.3340. In support of this assumption, a majority of pending orders in 100-pip range are set to sell.