Last Friday’s sell off and break below the big psychological number 1.2500 has put the focus back on the downside for the GBPUSD. The GBPUSD unwillingness to protect the gains made in the first days of the last week and the weekly close near the lows is indicative of strong bearish momentum. The break above 1.2673 swing high was also accompanied by a failure from the stochastic indicator to produce a new high, thus we can spot a bearish divergence which is a reversal signal.
To the downside we have the intraday support level 1.2418 while a break and a close below this level will expose the 1.2300 round number. To the upside any break above 1.2500 should quickly fade away and only a strong daily close above the big psychological number 1.2500 should suggest more upside for GBPUSD.
The UK economic calendar doesn’t reveal any major news event, but we have “proxy” risk events like the EU Extraordinary Economic Summit scheduled on Friday as the EU leaders meet to discuss and solve the current EU problems. The Brexit legal challenges will also be an important catalyst for driving higher the GBPUSD volatility.
Previous GBPUSD Weekly Forex Forecast
GBPUSD Weekly Forex Forecast – 6th Feb to 10th Feb 2017 – Bearish
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