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GBP/USD pounded on Boris backing Brexit campaign

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    GBP/USD witnessed a 130-pips bearish opening gap and remained heavily offered throughout the Asian session as markets digested weekend’s Brexit news.

    GBP/USD remains capped below 1.4300

    The GBP/USD pair sinks 0.83% at 1.4285, oscillating back and forth in a 10-pips narrow range since China open. The pound was battered against its American rival at the start of a brand new week as the Asian traders reacted negatively to the weekend’s news, citing London mayor Boris Johnson joining in the Leave camp, while the UK’s PM Cameron announced the referendum for Britain’s EU-membership on 23rd June 2016.

    Amid a data-light UK docket, focus will remain on the developments surrounding the Brexit talks, as the referendum is expected to be one of the biggest risk events for the GBP this year. From the US calendar, the flash manufacturing PMI will be reported today ahead of the durable goods and Prelim GDP report due later this week.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.4300/17 (round number/ 5-DMA), above which 1.4383/1.4400 (10-DMA/ round number) would be tested. On the flip side, support is seen at 1.4259/50 (Daily low/ psychological levels) below which it could extend losses to towards 1.4229/24 (Jan 28 & Feb 1 Low).
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