Article / 20 May 2016 at 8:40 GMT

Never mind the Brexit, here are the technicals

Technical Analyst / Saxo Bank
  • GBPUSD penetrates lower rising trendline
  • Rising wedge pattern could still unfold
  • 1.4870-1.4980 target remains in play 

London Underground
As always, mind the gap. Photo: iStock 

By Kim Cramer Larsson

GBPUSD didn't wind up drawing the exact wedge pattern discussed here, but instead penetrated the lower rising trendline in the possible rising wedge to test the neckline of the inverted shoulder-head-shoulder pattern. 

While doing so, the chart's movement saw the RSI break below the rising trendline in its own rising wedge-like pattern. 

Cable, however, proceeded to bounce off the neckline and is currently testing the 76.4 retracement of the bearish May market. The RSI jumped back above the lower trendline and back above the 60 threshold, signifying bullish sentiment.

A rising wedge pattern could still unfold, although it would be a broader than anticipated. 

The potential price target at around 1.4870-1.4980 (calculated on the  inverted shoulder-head-shoulder pattern) is still in play. 

A break above yesterday's high at around 1.4664 will confirm the short-term bullish picture whereas a close below 1.4330 will most likely demolish the wedge pattern picture. 

GBPUSD daily

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Source: Saxo Bank

— Edited by Michael McKenna

Kim Cramer Larsson is a technical analyst at Saxo Bank
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