In my last analysis of the Pound / Dollar, the pair was neural with an overall bearish bias.
Fundamentally, the UK had been experiencing trouble before COIVD-19 and the newest bad data would suggest that the UK will be one of the nations with the hardest recovery in the G10. (See BXY Analysis)
Seeing how the Pound is a riskier currency and the US well on it's way to recovery, the USD seems like the likely favor and we see that reflected on the charts. A new risk on sentiment is brewing even though fundamentals do not support such optimism.
Monthly
In my last GU analysis, I pointed out the down trend of weakness do to the UK's fundamental backdrop vs the US. The May candle displayed an Opening Bearish Marubozu Candle. The Opening Bearish Marubozu Candle is the least bearish of all bear candles, yet since then, the pair has continued it's bias forming a Open Real Body Bearish Candle. Price action followed through in analysis by breaking down and moving to test Major Qtr 1.2000. So far analysis has been on point. We can also see price action well below the 100 EMA and under the shorter-term 48 WMA, confirming it's bearish bias.
Weekly
The Weekly chart shows a breakdown below Minor Qtr. 1.22500 and holding with a bearish spinning top as the wick rejects the Minor Qtr. Price action hold true under the 100 EMA and 48 WMA, as the 13 EMA crosses and provided resistance. Price action is holding firm at the lows of the week of Aug 28, 2019 and September 03, 2019 week respectively. It should be noted that price has also broken away from the Monthly S4 Pivot of 1.24090.
Daily
The Daily shows a clean break of Minor Qtr. 1.22500, hold and a move down towards the May 18th lows, but not before consolidating between 1.21859 and 1.21634. A move to test the May 18 low is expect, and and ultimate move towards 1.2000. Howver, price action could take a rest pushing price to retest the May 22nd low of 1.21634, before continuing to the Major Qtr. 1.2000.
*There is a possibility of a DXY breakdown. That could effect the bearish drive of the pair as the dollar weakens.*
*This is speculation and does not constitute financial advice. It also does so with consideration of any new risk events that could change the fundamental direction of the pair. No trader is 100%. The rest is up to you!
Fundamentally, the UK had been experiencing trouble before COIVD-19 and the newest bad data would suggest that the UK will be one of the nations with the hardest recovery in the G10. (See BXY Analysis)
Seeing how the Pound is a riskier currency and the US well on it's way to recovery, the USD seems like the likely favor and we see that reflected on the charts. A new risk on sentiment is brewing even though fundamentals do not support such optimism.
Monthly
In my last GU analysis, I pointed out the down trend of weakness do to the UK's fundamental backdrop vs the US. The May candle displayed an Opening Bearish Marubozu Candle. The Opening Bearish Marubozu Candle is the least bearish of all bear candles, yet since then, the pair has continued it's bias forming a Open Real Body Bearish Candle. Price action followed through in analysis by breaking down and moving to test Major Qtr 1.2000. So far analysis has been on point. We can also see price action well below the 100 EMA and under the shorter-term 48 WMA, confirming it's bearish bias.
Weekly
The Weekly chart shows a breakdown below Minor Qtr. 1.22500 and holding with a bearish spinning top as the wick rejects the Minor Qtr. Price action hold true under the 100 EMA and 48 WMA, as the 13 EMA crosses and provided resistance. Price action is holding firm at the lows of the week of Aug 28, 2019 and September 03, 2019 week respectively. It should be noted that price has also broken away from the Monthly S4 Pivot of 1.24090.
Daily
The Daily shows a clean break of Minor Qtr. 1.22500, hold and a move down towards the May 18th lows, but not before consolidating between 1.21859 and 1.21634. A move to test the May 18 low is expect, and and ultimate move towards 1.2000. Howver, price action could take a rest pushing price to retest the May 22nd low of 1.21634, before continuing to the Major Qtr. 1.2000.
*There is a possibility of a DXY breakdown. That could effect the bearish drive of the pair as the dollar weakens.*
*This is speculation and does not constitute financial advice. It also does so with consideration of any new risk events that could change the fundamental direction of the pair. No trader is 100%. The rest is up to you!
Comment:
GU had not gone as thought. Central Banks are propping up equities as investors seem to be side stepping major risk events to seek profits. Price action seems to chop around making gradual moves higher, seemingly like a short squeeze. My bearish bias broke when price action broke May 08 high changing the trend entirely. A 3 bar reversal patter is visible on the Daily chart, but price action must test, break and reject 1.25000 for it to have a potential long-term reversal. Until, we see those events with conviction, the bias is now to the upside. I am not married to either side. Take what it gives.
Comment: