GBPUSD May Extend Its Slump Towards the 1.2800 Level Amid No-Deal Brexit

GBPUSD May Extend Its Slump Towards the 1.2800 Level Amid No-Deal Brexit

GBPUSD Price Analysis – October 18

On Friday, the GBPUSD exchange rate fell to the 1.2862 level and later the rate reversed north to reach a high level of 1.2962. As Boris Johnson made sobering comments that the UK should get ready for a no-deal Brexit, some downside risk could likely prevail in the market.

Key Levels
Resistance Levels: 1.3514, 1.3267, 1.3082
Support Levels: 1.2813, 1.2675, 1.2252

GBPUSD Long term Trend: Ranging
As seen on the daily chart, although it ended the week trading beyond the ascending trendline support retained beneath the MA 5 and MA 13, which is also directionless, as GBPUSD pair ranges. Meanwhile, the RSI has retreated near positive levels, now floating around its midline of 50.

In the wider context, the attention remains on the key resistance level of 1.3514. Continued trading beyond its moving average of 5 and 13 (now at level 1.2970) might also be the definitive breach above. Nonetheless, rejection at the 1.3514 level will at a later point sustain medium-term bearishness for another low beneath the 1.1409 level.

GBPUSD Short term Trend: Ranging
Last week, GBPUSD soared to 1.3082 level, but soon lost steam and turned sideways. Second, this week’s initial bias stays neutral. As long as the 1.2813 minor support level holds, the further spike may be slightly in favor. The recovery from level 1.2675 for re-testing high level 1.3482 may restart beyond level 1.3082.

On the downside, though, the drop at the level of 1.2813 may imply that the decline from the level of 1.3482 is not over. For a 38.2 percent pullback of 1.1409 to 1.3482 at the 1.2675 level, intraday bias might be switched back to the downside. All in all, the pair is at risk of dropping on the 4-hour chart, since it closed around a slightly bullish MA 5 but beneath a bearish MA 13.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.