As Brexit concerns continue to weigh on the Cable while the US dollar enjoys a well coordinated Fed hawkish tones. Let’s take a look at GBPUSD Weekly trade ideas ahead of Article 50 trigger
11 March, AtoZForex -It isn’t a fresh news that the article which formalizes the UK’s divorce from the E.U will be invoked by Prime Minister May. This happens after the House of Commons votes on the amendment guaranteeing rights for EU citizens. The amendment was earlier in the month approved by the House of Lords and it was seen as a major setback for May. If the House of Commons rejects the amendment on March 14th, May will perhaps press forward with triggering Article 50, which formally kicks off the U.K.’s divorce proceedings with the EU.
However, if the House of Commons approves rather than reject the amendment, May will be faced with a far more difficult decision of overturning Parliament’s rule. Either way, when Article 50 is triggered, a possible aggressive sell-off is expected in sterling as the inevitable becomes reality. In addition, Scotland could announce plans for a second referendum at any time. These events would in no doubt overshadow the Bank of England’s monetary policy announcement easily.
GBPUSD Weekly trade ideas ahead of Article 50 trigger
GBPUSD Daily Technical Analysis
From the Technical perspectives, Cable is due for at least a short squeeze as it’s trading at a key level. However, political risks in the region continue to have an overwhelming effect on the pair. The levels talked about within the week Levels to watch as GBPUSD approaches 1.2070 hasn’t changed much except an addition from the hourly perspectives. Going into the new trading week, 1.2070 remain a key level to watch out for as the political events unfold in the region. A break of the key 1.2070 support could have price accelerate the decline further to the 1.2000-1.19 region. However, if price crawls up above the 1.2200 figure, then bulls could push for the 1.2370-1.2400, its 50-Day Moving average.
GBPUSD Hourly Technical Analysis
From the 4 hourly technical view, GBPUSD is seen to be trading within a wedge pattern. Actually, a wedge within a wedge. Technically speaking, this wedge pattern is a bullish pattern as both wedges are both a falling wedge. If this is correct, we should expect a bullish reaction from here. The reason is, currently, the price is seen sitting closely just on the lower trend line of the bigger wedge, which should propel a reaction at least. Alternatively, 1.2070 figure coincides with the lower trend line of the smaller wedge which should have price supported should a break occur of the lower trendline of the bigger wedge. Be sure to stay glued to subsequent updates as we go into the new trading week.
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