1. Hello Guest Click here to check FX Binary Point Financial Directory

GBP/USD: upside limited on Brexit fears?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    GBP/USD's bid is fragile and has run in to supply, meeting resistance at the highs of the end of Feb rally from below 1.3834 at 1.4282.

    GBP/USD may have made a recovery on the greenback's weakness, but risks to the downside still outweigh on a fundamental basis - just look at the opinion polls in respect to a Brexit for example.

    Analysts at Rabobank explained:"The average of six polls between February 13 and 25 indicated that the ‘Remain' vote was ahead with 55% vs. 45%. Given reports that the amount of undecided voters is still large, the UK's EU vote could still go either way, " and added, "On the basis that the political uncertainty is a currency negative factor, we continue to see downside risk for sterling on a 3 mth view. Our forecasts that GBP can recover to GBP/USD1.50 and 0.70 on a 12 mth view assumes that the June 23 referendum will result in a ‘Remain' vote."

    GBP/USD levels

    GBP/USD is now testing below the 50 sma on the 1hr sticks and targets a break of the 10 sma on the same time frame at 1.4170 for a run at 1.4080 where the recovery started to consolidate on the 2nd March. S3 at 1.4129 maybe a fragile level support before such an objective can be met. To the upside, 1.438 and R2 is compelling where early Feb's bearish attempts were supported, ahead of 1.4423 and R3.
    For more information, read our latest forex news.

Share This Page