GBPUSD Technical Analysis, September 9, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts


Technical Outlook:

GBPUSD bears seem to be in complete control as they drag over 500 pips lower from 1.3500 handle. The currency has dropped to 1.2950 today, taking out support around 1.3000 levels. The tone is set for a deeper move towards 1.2100/1.2200 levels going forward.

GBPUSD might have completed its first impulse drop from 1.3500 highs through 1.2950 lows today. Ideally, it should be followed by a corrective rally through 1.3200/1.3300 before resuming lower again. The counter trend could resume anytime soon.

GBPUSD had earlier produced a religious uptrend between 1.1414 lows in March 2020 and 1.3500 last month. The entire rally could be seen as a potential impulse wave and has been marked accordingly as larger degree Wave (1) around 1.3500.

High probability remains for an A-B-C corrective drop, pushing prices lower towards 1.2100/1.2200 levels and terminating potential Wave (2). GBPUSD can resume its larger degree trend thereafter, which could point toward 1.4300 and higher.

Also note that fibonacci 0.618 retracement of the above rally is passing through the 1.2200 handle. If prices manage to drop there, bulls might be inclined to produce a bullish bounce and continue its rally as described above. The current drop could be defined as potential Wave A of the A-B-C correction.

If the above proposed structure holds well, a Wave B should resume higher towards 1.3200 levels anytime soon from here. GBPUSD could then turn lower towards Wave C lower. The currency remains a good candidate to be sold on rallies from here.

Trading Strategy:

Short against 1.3500, target is open.

Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

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