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GBPUSD price action analyses

After failure of last week negotiations  and just six months ahead of the deadline, there’s  still so much political gamble around Brexit. The main deadlock subject is Irish border problem and  solution is nowhere to be seen. Latest news do not add any optimism – May  seems to be losing support for a no-deal Brexit if the EU refuses to continue negotiations. Further political developments are not clear and this creates utmost uncertainty in GBPUSD trade.

But I have to say that despite massive negative headlines recently, sterling seems to continue resisting fiercely. Price action remains very chaotic and reactive to the news and rumors. Therefore, coming weeks we will see a lot of volatility in this pair.

Weekly GBPUSD charts will give us much more insight into expected price action in October. Technical picture reveals probability that eventually 1.2750 support area will not sustain and the pair will make another leg down. As we can see, last two weeks in row sterling tried to break 1.3310 resistance area but both attempts were futile. Eventually  we see a formidable  1.3310 and 1.3530 resistances  above and clearly defined  two “falling star” weekly candle patterns. In theory,  it is a very strong bearish setup and this is exactly type of setups we are looking for to realize our trading edge.

GBPUSD Week

GBPUSD weekly chart

 

Therefore in the coming 2-3 weeks I will remain bearish shorting GPBUSD from current price levels and especially on  confirmed breaking support level of 1.2950. I will also consider buying any rally  to 1.3110 and 1.3140.  Breaking above 1.3310 will cancel this bearish scenario.

Safe trades and have a great week ahead !

Fuad