GBP/USD WEEKLY TECHNICAL FORECAST: POUND STERLING SURGES AS CONSERVATIVES WIN UK ELECTION BUT 1.3500 LEVEL REMAINS AN OBSTACLE
GBP/USD costs have skyrocketed 13% larger from year-to-date lows as PM Boris Johnson steers the UK nearer to delivering Brexit with a conservative majority in British ParliamentThe Pound Sterling might proceed to rise on the again of elevated Brexit readability following the UK common election, however GBP/USD charts might battle to eclipse the 1.3500 worth stage GBP/USD is predicted to be essentially the most lively main foreign money pair next week judging by implied volatility derived from foreign exchange choices contracts
The British Pound soared final week on information that conservative MPs swept final week’s common election to achieve 46 seats and a majority in Parliament, which is predicted to interrupt the longstanding gridlock and supply a clear path to Brexit earlier than the January 31, 2020 deadline.
Spot GBP/USD costs have potential to maintain climbing on hopes that ‘Brexit paralysis’ will now not cripple the UK economic system, however the Sterling might have bother topping its recent 2019 excessive of 1.3516.
GBP/USD PRICE CHART: WEEKLY TIME FRAME (JULY 2017 TO DECEMBER 2019)
The 1.3500 now seems to be a transparent resistance stage that will maintain a lid on additional upside within the British Pound. This technical stage is roughly underpinned by 61.eight% Fibonacci retracement of spot GBP/USD’s buying and selling vary since printing its April 2018 excessive.
GBP/USD costs might churn larger, nonetheless, because the MACD indicator illustrates bullish momentum gaining tempo. Likewise, the increasing width of the 2-standard deviation Bollinger Band might, statistically talking, allow additional upside potential.
GBP/USD PRICE CHART: DAILY TIME FRAME (AUGUST 2019 TO DECEMBER 2019)
Shifting focus to a day by day GBP/USD chart reveals the wholesome uptrend etched out by the cable since its September 03 swing low. On that notice, the positively sloped trendline connecting the October 09, November 26 and December 12 lows might supply buoyancy to the British Pound.
Information supplied by
of purchasers are internet lengthy.
of purchasers are internet brief.
Equally, the 23.6% Fibonacci retracement stage roughly across the 1.3150 might present confluent assist to identify GBP/USD costs. A drift decrease could possibly be within the playing cards after a tough rejection on the 1.35 deal with and contemplating the relative energy index is working red-hot, which means that the current rally within the Pound Sterling could possibly be a bit overdone.
BRITISH POUND VOLATILITY INDEX (BPVIX) & GBP/USD PRICE CHART: DAILY TIME FRAME (DECEMBER 2018 TO DECEMBER 2019)
That stated, danger of one other hung Parliament is now within the rearview mirror and is mirrored by a plunge within the British Pound volatility index (BPVIX). The dropping correlation coefficient between spot GBP/USD costs and BPVIX means that the British Pound might rise additional on the again of lowered uncertainty on the horizon.
Hold Studying: US Greenback Outlook as FX Volatility Rises from Excessive Lows – USD Ranges to Watch
— Written by Wealthy Dvorak, Junior Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception