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Market View

Hard Brexit dominates on GBP pairs

Monday, January 16, 2017 4:31 AM GMT

Markets anticipate Theresa May’s speech on Tuesday while hard Brexit scenarios are on fire. The Sunday Times reported May will organize to withdraw from tariff-free trade with the EU in return for freedom to limit immigration and strike commercial deals with other countries.

Therefore, all GBP pairs opened with gaps today while now they are trying to close the morning’s gaps. 

See few examples below:

EURGBP H1


GBPCAD H1


GBPJPY H1



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Technical View

Reviewing GBPUSD on daily timeframe, we can see today’s gap and price sliding below 1.20 and creating a potential double bottom (noted with yellow cycles).  Important resistances on 1.212 and then 1.23. However, the trend remains bearish and selling opportunities may occur while price goes higher.

Daily


(EMA = Exponential Moving Average, SMA= Simple Moving Average
 5EMA=Purple, 21EMA=Gold, 55EMA=Green, 200SMA= Blue)


As usual, heading lower on hourly timeframe, prices need to stay above the grey zone in order to have an immediate uptrend momentum. Next major resistance on the blue zone 1.212 – 1.215. It’s obvious that the pair is in downtrend so buyers need to be cautious and use tight stops.

Hourly


(EMA = Exponential Moving Average, SMA= Simple Moving Average
 5EMA=Purple, 21EMA=Gold, 55EMA=Green, 200SMA= Blue)
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