GBPUSD is close to dropping below 1.3 despite a positive UK PMI data. All attention on the conservative party conference as more BREXIT headlines approach.
The UK PMI came better than expected today. The data came at 53.8, more than the expected 52.6. The rally that followed was very short as the overwhelming bears took charge again. The effect of the FOMC last week saw a bullish dollar and GBPUSD crashing toward 1.3. The week started bullish before the UK PMI data but the BREXIT concerns still pose the biggest risk on the nearest future of the Sterling. The UK prime minister is under pressure as the last meeting with the EU leaders ended in a stalemate. GBP has not yet recovered from the shock. Data aside, markets will be interested in the BREXIT headlines coming from the four-day Conservative party conference which started on 30th September.
GBPUSD: Technical Overview and Important Price levels
Last week, we expected the bearish run to continue to 1.29 after the bullish correction to 1.32 ended. Price did just as expected as it gets close to breaking below 1.3. The chat below was used in the last update.
The drop from 1.33 to 1.3050 could have completed a bearish impulse wave following a larger degree bullish correction ending at 1.33. The current rally from 1.3050 is the wave ii) correction of the bearish 1.33-1.3050 dip. The rally could continue to 1.32 before price continues downside. The bearish commitment will be confirmed if price breaks below the wave a-b-c rising channel. The next bearish price target is 1.29.
Price continued downside after hitting 1.32. The chart below shows the new update.
Just while writing this analysis, Sterling spiked by 100 Pips despite the immediate bearish trend. As the conference proceeds, headlines will be flying which market will react to quickly. BREXIT talks still remain the biggest risk concern up to 3rd October before the NFP employment data in the last day of the week. In conclusion, if the conference is positive about BREXIT, we might see price back to 1.33 before NFP, otherwise, the bearish trend will continue to 1.29 and below.
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