Early in today’s London session, Pound Sterling retreated from yesterday’s dip. Is there a bearish market perception clouding the Cable as Brexit talks end in limbo?
GBPUSD started today on a bullish note. Hiked to 1.3130 early in the London market before slumping toward 1.3100 after a negative UK retail sales data. The news coming from the ongoing EU summit is not favorable for the BREXIT deal. It seems the summit would end in a no-BREXIT deal scenario as the EU leaders even dropped the plans for a November BREXIT talks. U.K is already looking unsure of a successful deal as talks of an extension of the negotiation has come up in recent days. The UK retail sales data for September released earlier today, dropped to -0.8% m/m against -0.4% m/m expected. GBPUSD might drop further especially if price breaks below 1.3100 handle as a result of continued negative headlines and a rejuvenated Dollar.
GBPUSD Technical Overview and Important Price Levels
The rally from 1.292 to 1.326 looks corrective as previously shown. Prior to 1.292-1.326 corrective surge, a well established bearish trend since the early period of the year, is ongoing. From 1.326, we might see a bearish impulse wave as a sub-wave of a bigger bearish scenario. To continue the bearish move, price is expected to break below 1.3080-1-31 support zone. Below 1.3080-1.31, 1.292 is the next significant support level. A break below 1.292 would see price at 1.28. An alternative outlook is price dropping to 1.3050 to complete a correction from 1.326-1.3050. If this happens, it’s right to say that the rally from 1.292 will end up being a double zigzag pattern with a bullish move 1.34.
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