MO GBPUSD – 11.25.2018
38188
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MO GBPUSD – 11.25.2018

Long Term Overview:

Economic Analysis

According to a leaked draft Brexit Document, the EU and U.K. is said to build on a “Single Customs Territory”. The document allegedly includes that the EU is to recognise the U.K.’s independent trade policy, while stating determination to replace the Northern Ireland backstop in the future. This leaked draft document led to an exponential upsurge in Buyers present within the pound market in recent days. However, the prospect of a Brexit Deal getting through U.K. Parliament is shaping up to be of low probability. As a result of this, the Pound may be subsequent to further indecision in the medium term.

In Recent weeks, The United States and Canadian government have forged a new trade agreement to replace NAFTA, preserving President Trump’s ability to impose a 25 percent global tariffs on auto parts from Canada and Mexico – The USMCA trade deal is set to strengthen the dollar in the mid – long term, as a result of a combination of lower market uncertainty and stabilisation of the continents long standing trading relationships.

With the combination of future forecast of market uncertainty within the Pound, paired with the relative resumption forecast of the US Economy seeing further growth in the medium – long term, this suggests that the GBPUSD may continue to fall in the near term.

Long Term Analysis

Pound/Dollar bias is short on all monthly time frame charts presented. Price broke out of its Price Action Pullback into the 3Month EMAs after closing below previous lows on the second previous 3Month Candlestick. The United States Economy is forecast for greater growth than the United Kingdom Economy, due to the uncertainty of how Brexit will Affect the UK in the Long Term. Not only this, but the current formation of a shooting star candlestick on both the monthly and bi-monthly, suggests that price is under further bearish pressure. Based on these factors, Price may see a continued push south nearing previous lows of the 1.2110 area within the next couple of months.

 

Decision Point: push below previous lows nearing the 1.2768 area

Long Term Trend: Short

Channel Range: N/A

Possible Bias: Short

Medium Term Analysis

Bias is short on all time frame charts presented. However, Cable is currently seeing a large amount of indecision; suggested by the current formation of a doji on the Weekly and Bi-Weekly charts. This indecision within the market may be due to the uncertainty of how events will take place at the EU Summit potentially on November 25 2018. Though current market indecision is currently persisting, a shooting star candlestick has been formed on the Monthly Chart. This may suggest that after the current indecision, Sellers could continue to drive price to the short side, nearing previous lows around the 1.2635 area, in the next couple of weeks.

 

Decision Point: Close below a previous low nearing the 1.2852 area

Long Term Trend: Short

Channel Range: N/A

Possible Bias: Short