Sterling Pound Technical Outlook – GBP/JPY, GBP/USD, EUR/GBP

STERLING POUND FUNDAMENTAL FORECAST – BEARISH

  • The sterling pound was under lots of pressure this week with hopes of a Brexit deal fading.
  • GBP/USD brews a bear flag formation and even though a probe lower that is driven by worse news on Friday, prices nudged back over the key support area, keeping the flag in play before next week.
  • GBP/JPY seems to be straddling on the big support spot, but the EUR/GBP might have an extra amenable decline for long term GBP weakness
Free $100 Forex No-Deposit Bonus

Considering this weeks’ headlines in the UK, it is highly likely that it might have been worse for the sterling pound. However, in both GBP/JPY and GBP/USD, the British pound surrendered some value with the odds of a Brexit deal fading. This week was largely sealed by Friday announcement from the Prime Minister that the UK ought to prepare for the No Deal Brexit early next year. This has prodded a fast sell-off in the GBP/USD which spanned about 100 pips, but the GBP/USD rate quickly rebounded back over the key support area. However, from what we already know, nothing has been made official at this point, and this might be just another step in the Brexit deal saga with both the EU and the UK has to currently deal with the surging covid-19 numbers.

On the following chart, the GBP/USD seems to settle on the bear flag. This was marked by the formation of the bullish pattern after the quick sell-off in September and the support side of this channel matches with the key levels derived from the long term Fibonacci retracement. This level was temporarily breached this morning after the Boris Johnson news, but the prices fast returned as we approach next week. It’s highly likely that this flag will still be possible next week.

GBP/USD Four-Hour Chart

If we take a step back to evaluate the long term picture and the break of the bear flag could open doors for a move down to September support territory at 1.2712. Also, this is the Fibonacci level that was initially extracted as a 61.8% retracement. Another support zone, possibly exists around the 1.2500 zone, and if we get a more intense session of risk aversion or the extreme level of selling in the GBP driven by the Brexit headlines, this territory can fast come into play.

GBP/JPY SETTLE ON ITS SUPPORT

Back on the near term side of the EUR/GBP and Sterling Pound might be the point of attraction. The support build in the area between 0.9000 and 0.9033 on the chart has assisted the rebound to slow down and considering the wedge build, the doors might soon start re-opening to a bullish breakout as Australian Dollar Eyes China 3rd Quarter GDP Data, Earnings Surging Coronavirus Cases.

Copyright © 2020. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.