As the possible news of Theresa May’s resignation is at the forefront of today’s market moving events, GBP/USD and associated cross pairs highlights as most volatile. On a wider scale, GBP ranks automatically tops on the volatility scale in comparison to its counterparts EUR, NZD, AUD and USD. Why volatility means GBP ranges are far wider than counterparts.
GBP has ability but previously lacked the necessary inputs. Current GBP/USD as mentioned yesterday is far overbought and desperately needs a correction. May’s resignation overall is viewed from a personal perspective as a tragedy because I believed May would bring a great nation with enormous economic potential back to its proper role among nations.
GBP/USD range for today is located from 1.2520 to 1.2589. Below 1.2520 then next targets become 1.2512. Below 1.2512 then a free trade long exists. On the bottom side, GBP supports are strong and located at 1.2459 and 1.2384. Any GBP/USD price above 1.2576 enters the overbought stratosphere which means a price above cannot hold nor close in the region. Price spikes are meant to sell. Our target today is 1.2632.
GBP/JPY vital break points for today are located from 136.51 to 137.25. Current GBP/JPY is oversold particularly from MA’s 10 to 100 day. Below 136.51, targets 136.42 and the point where we will see a bounce. Above for GBP/JPY, solid resistance exists at 138.26 but also a must break point to target higher prices at 139.39 and 140.52. Lower for GBP/JPY means further oversold.
GBP/CHF. Range for today is located from 1.2554 to 1.2623. Below 1.2554 targets 1.2546. Strong supports exists below at 1.2487 and 1.2453. GBP/CHF needs a correction as its price lives in overbought territory. At 1.2607 for example, GBP/CHF resides in the upper stratosphere.
GBP/CAD. Range for today is located at 1.6673 to 1.6764. Below 1.6673 targets 1.6659. As is the case for GBP/USD, GBP/CAD is overbought and sits on solid supports at 1.6589 and 1.6437. Part of GBP/CAD overbought is explained by USD/CAD as USD/CAD sits oversold and just above 1.3312 and 1.3273.
GBP/NZD. Supports below exist from 1.7699 and 1.7487. Today’s range and break points are located at 1.7949 to 1.7851. Below 1.7851 targets 1.7840. Overbought begins at 1.7961 and far overbought at 1.7998.
Overall, GBP pairs are well supported below yet overbought and in need of a correction. On the USD side is an oversold USD/CAD, USD/CHF and USD/JPY. Most special to the overall conundrum is a far overbought DXY.
Brian Twomey