Last week’s GBP/USD mini-flash crash has not just reinforced the bearish trend, but it has also confirmed that it’s quite hard to predict the velocity and the volatility of the market. Most often under this circumstance, we’re going to consolidate or even bounce at least to the 1.2542, 38.2 Fibonacci retracement near the. In the short-term GBP/USD remains trapped inside a wide range between the 1.2000 big psychological number and 1.2500 big round number and resistance level. The Stochastic indicator is resetting from the oversold conditions, but the correction is normal within the broader downtrend, which is why we remain bearish. Early in the week, we should expect a retest of the 1.2150 intraday support before a rally back to the 38.2 Fibonacci retracement. The UK economic calendar looks light and no major risk event is on the docket that can disrupt the volatility, however, we need to pay attention to the fears regarding a possible hard Brexit that might encourage further selling. Although it might seem that price have found the bottom last week, we believe that GBPUSD might retest last week's low again this week. Stochastic is right about in the middle at this moment but that could also mean that it has more room for a downward movement. Sentiment is not positive at the moment and if we have to take a position on direction, we expect this week to be bearish for GBPUSD. The key to surviving past all this craziness is to employ a simple but sound money management strategy - never risk more than 5% on any trade. The lower the better of course...

GBPUSD Weekly Forex Forecast - 10th to 14th Oct 2016 - BEARISH