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GBP/USD: short-lived rally, back to Brexit fears again?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    GBP/USD has been trading in a recovery of late, but met keen supply at crazy heights given the magnitude of last week's rally.

    GBP/USD is located around the 1.44 handle and supply knocked the wind out of the bulls at 1.4513 after the strongest daily recovery since October 13th 2015. While the greenback has been set back on the FOMC, there are increased risks to sterling on the build-up to the referendum. BoE's Forbes said this earlier today in fact.

    "Prolonged heightened uncertainty could push up UK's cost to borrow in sterling," explained the MPC member, meaning more downside to follow for sterling. The political upheaval is a reason to remain short of the pound, but while markets reflect on the FOMC, the dollar is also in the firing line.

    Greenback hit on the dot plot revisions - FXStreet

    US dollar on the back-foot, technically bearish - BBH

    GBP/USD levels

    1.4360 longs on the 17th March rally to 1.4500 are under pressure while the 20 4hr has been broken to the downside at 1.4406 below the pivot of 1.4467. A continuation of the supply targets the 50 sma on the same time frame at 1.4313 and 1.4280. The 2016 high is 1.4666.
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