Trading the GBP carries heightened risks of being whipsawed as the erratic and unpredictable ebbs and flows continue, a reflection of the uncertain state of play in the Brexit negotiations. The latest elongated spike on Sept 5 marks the 2nd time in over a week in which an overly short GBP market (as pe CoT positioning) got topsy-turvy running for the exits. The weakness in the DXY as of late has played a key role in supporting the GBPUSD rate too.
At present, sell orders at the 100% fib proj of the latest structure break by contrarians, liquidity providers, act as line in the sand, capping further rises. On the downside, 1.2875 has become a key area of support, and if one notices, in the first pass post Sept 5 spike, the rejection of the area was fast and furious, as shorts scrambled to the exits, hence taking the opportunity to close their positions to limit the damage as the structure of the market had clearly turned bullish.
On Friday, the US NFP release and possibly comments on Brexit, will determine the next direction. As correlations stand, the UK vs US yield spread is not justifying a break through resistance at 1.2960, but similarly, the weakness in the DXY is keeping the rate underpinned. One should not ignore the velocity of the move up on Sept 5 and the violation of the bearish structure, making the GBP/USD market more prone to see increased buy on dips interest all things equal.
Out of all the currencies, given the unpredictable nature of the Brexit negotiations and the volatility expressed in GBP, the pair remains very subject to behave on a headline-by-headline basis.
At present, sell orders at the 100% fib proj of the latest structure break by contrarians, liquidity providers, act as line in the sand, capping further rises. On the downside, 1.2875 has become a key area of support, and if one notices, in the first pass post Sept 5 spike, the rejection of the area was fast and furious, as shorts scrambled to the exits, hence taking the opportunity to close their positions to limit the damage as the structure of the market had clearly turned bullish.
On Friday, the US NFP release and possibly comments on Brexit, will determine the next direction. As correlations stand, the UK vs US yield spread is not justifying a break through resistance at 1.2960, but similarly, the weakness in the DXY is keeping the rate underpinned. One should not ignore the velocity of the move up on Sept 5 and the violation of the bearish structure, making the GBP/USD market more prone to see increased buy on dips interest all things equal.
Out of all the currencies, given the unpredictable nature of the Brexit negotiations and the volatility expressed in GBP, the pair remains very subject to behave on a headline-by-headline basis.
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👉👉 Join The OFA Inner Circle:
📓📓Learn Order Flow like a PRO:
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📧📧 DM me if doubts (100% response rate)
📓📓Learn Order Flow like a PRO:
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🧑🏫🧑🏫 Author of the #1 Order Flow Script:
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.