GBPUSD is currently heading downward after BREXIT still not being fully resolved 2 months after the UK were supposed to leave the EU.

This is having a negative impact on price movement as its creating uncertainty for the currency. The closest immediate support zone is 1.26200, however, price only hit this point last week and may end up breaking through on the next hit. This is because on the 4 hour chart we can see the MACD line beginning to cross the signal line and the histogram beginning to turn red, suggesting bearish movement in the future (already happened!).   

GBPUSD 4 hour chart.

On the daily chart there’s a big gap between the MACD line and the signal line suggesting that bearish movement may continue in the future. However, it does seem that the two lines are beginning to get closer together so this may suggest that the market is beginning to run out of steam.

GBPUSD 1 day chart.

Personally, I’d be watching the 1.25000-1.25500 area carefully (marked in green) (already happened!) . If price quickly rushed to this area and then gave effective price action, and the 4hr MACD crossed over id be looking to go long to the next support zone of 1.26219. It is also possible that it could attempt to move to the 1.27000 line before trying again at the bottom support line. If price slowly came down and was consolidating near the lows of the green area i'd be waiting for the MACD histogram to shorten and then as soon as price broke out of the zone i'd be looking to sell to the 1.23750 level or even all the way down to 1.21200, depending on what the market was telling me at the time.

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Written by Dan Randall, Technical Analyst. Email: dr@thetrade.academy
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