GBP/USD Signals Update
Last Thursday’s signals were not triggered and expired.
Today’s GBP/USD Signals
No signal is given today.
There are times where political developments can exacerbate a strong trend and send a currency soaring or into freefall. In these kinds of conditions any technical analysis can become more or less a joke.
We are in this situation right now with this pair, or to be more specific, the GBP is in freefall right now. Although we have been in a strong downwards trend with this pair, the stunning drop in the GBP over recent days has been the increasing sense that Scotland is very close to voting to become independent a few days from now, and this will bring a great deal of economic and currency uncertainty to the United Kingdom. It is not known whether an independent Scotland would be able to remain part of the GBP. In any case the market is spooked.
This pair seemed to be finding a bottom on Friday just below 1.6300, and the chart showed a likely zone of strong support technically at around the key psychological level of 1.6250. However an opinion poll was released over the weekend showing that the pro-independence vote is in the lead for the first time, and this caused the pair to gap down massively. The gap is huge and unusually, the pair right now looks like it is going to fall even further instead of filling the gap.
It is really impossible to say what will happen next. It might be that new polls showing a strong increase in the no vote could cause a bullish recovery. In any case, technically this pair remains strongly bearish but extremely unpredictable. My colleague Christopher Lewis also sees continuing bearishness.
There are support levels below at 1.6142 and 1.6067.
There are no high-impact data releases scheduled today concerning either the GBP or the USD.