GBPUSD plunged like a stone at the start of the Asian session, hitting a 31-year low. The significant support level at 1.2000 was once broken, yet It was followed by a quick rebound, recovering the level.
Currently the speculation about the sharp fall, centre around dealer fat finger, or algorithmic sell orders triggered by French PM Hollande’s statement on tough Brexit negotiations.
The bearish momentum has intensified since Tuesday 4th , after the mid-term major support line at 1.2800 was broken on the strengthening of the dollar, and the uncertainty about the trigger of Article 50 for the UK to leave the EU. The selling pressure above has been increased.
It is trading below the short term downtrend line resistance, where the resistance level at 1.2500 converges. The level is the current major resistance.
The bearish momentum is still ongoing, testing the support level at 1.2300. Whether the bearish momentum will be held at this stage depends on the performance of US Non-Farm Payroll figure today.
The current support line is at 1.1220, the short term major support level is at 1.2000.
In the long term scope, we still need to be cautious about the downturn risks associated with Sterling during the process of Brexit negotiation.
The resistance level is at 1.2400, followed by 1.2500 and 1.2600.
The support line is at 1.1230, followed by 1.1220, 1.2100 and 1.2000.
The dollar has strengthened significantly this week as a result of the outperforming US economic figures, weighing on the Euro and other major currencies.
EURUSD has fallen below the level at 1.1200 since yesterday, hitting a two-month low.
The bearish momentum was held at the short term major support level at 1.1120, where is proving a stronger support.
The 4 hourly Stochastic Oscillator is around 20, suggesting a rebound.
Whether the price will rebound at this point or break the support level depends on today’s US Non-Farm Payroll figure.
The resistance level is at 1.1140, followed by 1.1160 and 1.1180.
The support line is a t 1.1120, followed by 1.1100 and 1.1080.