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#1 25-01-2021 10:08:56

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3068
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GBP/USD: a post-Brexit technical perspective

GBP/USD: a post-Brexit technical perspective


Much has been written about the British pound following the Brexit referendum over the last few years. Now that the Brexit referendum has finally taken place and we can all move forward, now is as good a time as any to take a look at the most important British pound pair, the GBP/USD.

Meanwhile, since the Brexit referendum, a virus has hit the world. However, the two events so far are not of great importance compared to the fall of the GBP/USD during the 2008 financial crisis (index - see far left of the chart below).

http://www.forex-central.net/forum/userimages/GBPUSD-monthly.png


1.40 - 1.45, a key area for the GBP/USD pair

When looking at and interpreting the monthly table, Brexit or the virus don't matter in the grand scheme of things. After all, as the graph shows, there have been other times when the pairs have covered more ground.

It seems that the GBP/USD, also known as the "cable", has formed a triple bottom on the monthly chart. The last low, caused by the March 2020 fall during the pandemic, was followed by a strong rebound - a rebound that is still continuing.

Thus, the 1.40-1.45 zone becomes the key to the pair in the medium to long term. This zone is essential because it was an important support during the great financial crisis and then a strong resistance during the first rebound after the Brexit referendum.

As far as support and resistance levels are concerned, the more the price has the power to re-test it, the weaker the support or resistance becomes. Therefore, in a further attempt at this, the GBP/USD could complete the triple bottom, and attention will be focused on the measured movement of the reversal pattern.

The measured movement, calculated by measuring the distance between the triple bottom and the resistance zone, is projected from the breaking point. The target is 1.65, and traders would be thinking about this if the pair reaches 1.45.

As of this month, the UK is on its own. A new chapter begins and no one knows whether Brexit will be an economic success or not. At first glance, the UK seems to have more to lose from the "divorce". At the same time, this new status seems attractive to investors from all over the world who are willing to bet on the survival of one of the world's most developed economies.

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"Anything worth having is worth going for - all the way." - J.R. Ewing

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