Short term
Trade view / 28 July 2016 at 5:29 GMT

GBPUSD bottoming potential persists

Managing Director / Technical Research Limited
New Zealand
Instrument: GBPUSD
Price target:
Market price:

The US Federal Reserve’s monetary policy statement came and went with barely a ripple in financial markets.

Market pricing still hovers around a 50:50 chance of a Fed rate hike by December. Today’s first look at the June quarter GDP number may provide some action in the USD but only if the 2.6%-2.4% year on year expectation misses. 
In contrast, a rate cut from the Bank of England (and perhaps other easing measures) now looks to be a done deal next Thursday and GBPUSD traders are positioning themselves for what will certainly be a market moving announcement.

Management and risk description

Since the Brexit carnage, Sterling is still attempting to form a 4-Week Inverse Head and Shoulders reversal (refer daily chart below).

GBPUSD is showing a sustained break above this resistance (currently situated at 1.3440) will establish an upside projection toward the 1.4140 level, which also approximates a Fibonacci 61.8% retracement of Sterling’s entire 1.5020 – 1.2800 decline (see daily chart below).

The decline from last week’s 1.3480 peak assumed the form of a complex corrective “Double Three” Elliott Wave structure, which ended yesterday at 1.3060.


Entry: Today, any reaction to 1.3190/1.3160 would present a buying opportunity.

1.3129, initially. 

Leaving open for now to give daily reversal structure every chance to complete.

Time horizon:
Allow several weeks to develop.

GBPUSD Daily chart (click to expand)
GBPUSD  Daily Chart
Chart: GBPUSD weekly chart (click to expand)
Source: Both charts, ThomsonReuters  

— Edited by Adam Courtenay

For more on forex click here             

Non-independent investment research disclaimer applies. Read more
sam wightman sam wightman
Hi Max
I was following you on GBP/USD. do you have an update ?
sam wightman sam wightman
Has the Sterling found some strength ?
Max McKegg Max McKegg
Hi Sam, Sterling is finding it hard to "take a trick" and is best left until it makes its mind re the next significant trend move. USDJPY holds my trading interest!
vyacheslav111 vyacheslav111
Hi,Max ! Your opinion on GBP / USD now ?


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail