Forex Video Briefing (9/19) – GBP/USD and EUR/GBP
Cable rallied from the Sept. low of 1.6052 to 1.6525. With the vote in, the GBP/USD retreated holding below the 200-period SMA in the 4H Chart, with focus back on USD-strength across the board. 1.62-1.6250 is next, a break below 1.62 would clear below a trendline and the moving averages in the 4H chart, and the market should turn neutral-berrish if not simply bearish. Looking at the daily chart, we can see that the market is bearish. The falling trendline from 1.7191 was tested and remained as resistance. The RSI held below 60 and even 50, showing maintenance of bearish momentum. So, the market is either neutral-bearish, or simply bearish with downside risk first to 1.62, then the 1.6052 low. If that is broken, the 1.60 handle is next.
The USD was strong so the GBP/USD is remaining bearish. But the euro is weak, so the pound is still stronger than the euro, and the EUR/GBP is still bearish. The daily chart shows a break below a 2-month consolidation. If we see a pullback, we should see sellers in the 0.79-0.7950 area. Otherwise, the market might be back in consolidation mode. Otherwise, EUR/GBP remains bearish. Its prevailing downtrend is intact. With the current breakout, there is further room to fall before the 2012-low at 0.7764.