Bottom line: GBPUSD long term structure continues to remain bullish against 1.1414 lows print in March 2020. The currency might have carved a meaningful top around 1.3500 handle and remain in control of bears over the next few weeks. GBPUSD might push through 1.2200, which is potential support.
EURUSD had slipped to 1.1750/54 lows before finding support. The exchange rate has managed to hit 1.1915 highs over the last week after ECB kept interest rates unchanged. Further, the Euro Zone Q2 GDP clocked in marginally better than expected at -11.8%. The exchange rate might remain under pressure if US-China tensions triggers another round of selloff in stocks.
GBPUSD has dropped over 720 pips since September 01, 2020 printing 1.2763 lows on Friday. The exchange rate collapsed on Brexit woes and could remain under pressure, going further. Watch out for the Employment numbers coming out tomorrow, unemployment rate might have marginally increased in July (4.1% Vs 3.9%).
FTSE had managed to rally over the last week by +3.25%, closing in at 6027. Futures are up today and trade above 6050 as we prepare to publish. Global Indices remain vulnerable over rising US-China trade wars; TikTok sale and other tech companies might trigger another round of risk aversion. The race for US Presidency might be another event risk over the next few weeks.
GBPUSD has reversed sharply after printing highs just below 1.3500 handle early this month. The currency has remained in control of bears as they managed to push through 1.2760 handle. Intraday pullbacks might remain well capped below 1.3500 mark, going forward.
GBPUSD had dropped to 1.1414 lows in March 2020. The currency had produced a religious rally since then and pushed through 1.3500 resistance on September 01, 2020. Please note that the entire rally between 1.1414 and 1.3500 might be potential impulse wave, which should be retraced.
The fibonacci 0.618 retracement of the above rally is seen close to 1.2200 mark. Bulls might remain inclined to regain control if prices manage to drop through above levels. A sustained drop below 1.1840 might change the structure to bearish, going forward.
Most traders might be preparing to initiate fresh short positions around 1.3200/50 levels which is resistance zone. The protective stop might be placed above 1.3500 handle with projected target towards 1.2200 respectively.
Harsh Japee, Technical Analyst.
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