GBPUSD near-term price action review
It is a near-term rebound and should be treated as such. May was able to win a leadership contest yesterday, but Brexit saga is far from solution yet. May is going to Brussels today to seek compromise from European leaders in terms of legal assurances that Irish backstop won’t be ‘indefinite’.
However, EU leaders have unanimously declaring that they have no intention of changing the agreement.
May is determined to “deliver” Brexit no matter what. Now, as no-confidence option is dropped, the chances of no-deal Brexit are higher.
We are witnessing post-vote driven near-term rebound. On H4 chart we see serious hurdles for the further up-move. While I personally think the up-move is less likely to continue today but if price breaks 1.2680 and above, the next resistances 1.2740 and 1.2840 are very capable efficiently to stop and reverse this move. Pound will enter again into uncertainty mood driven by headlines and sharp spikes up and down.
On H1 chart it is even better visible, the downward-sloped resistance area around 1.2670-1.2770 will be hard to overcome and price will retrace in this area before trying to engage in another upward impulse.
Risk-savvy traders may use these resistance clusters for tactical intraday short trades. Use limit orders and scaling into position at several levels – this is elementary risk managing approach and take profits quickly.
Have a nice day and safe trades !