FUNDAMENTAL

No economic releases of note today for GBP or USD.

Price will trade on risk flows, Brexit polling data (if any is released) and price action.

Despite promising economic releases earlier in the week, including industrial ouput strengthening, Brexit risk sentiment has dragged on Sterling since midweek.

Perhaps due to Brexit concerns, gauges of domestic sentiment such as the RICS house price balance delivered disappointing data on Thursday although some measures of actual performance were better than expected, including Non-EU trade balance.

Meanwhile the USD stabilised after last Friday’s NFP shocker, and benefited from a risk-off flow on Thursday following Chinese CPI missing target.  Judging by overnight Nikkei performance this Risk Off attitude will continue on Friday.

The overall result was a bearish Cable, and the same fundamental factors remain in place for today’s trading sessions.

Volatility will rule up to the EU Referendum on June 23 with risk to the downside as dollar bulls regroup eyeing a July or September Fed Hike and an uncertain Brexit outcome deters GBP buyers.  Further polls are unlikely to show a significant shift towards a “Remain” result:  Cable risk is to the downside.

TECHNICAL


The bigger picture is a range moving into a wedge, with a long term bearish line of resistance moving across a rising channel.  The wedge concludes at just about the time of the scheduled EU referendum and as we know a strong breakout will occur at that time if it has not before.

The monthly M3 pivot held price down and a move to MM1 is implied: this would entail a break below the support line of the rising channel.  This is feasible in light of weighing Brexit risk sentiment and a stabilisation and regrouping of dollar bullish sentiment.

The pair is however oversold on most higher time frames, suggesting some support on the current factors.

3 thoughts on “GBPUSD Outlook (June 10, 2016)”

  1. Wayne McDonell - TradersWay.com says:

    Pivots next week will be interesting eh?

    1. Andrew Evans says:

      Weekly central pivot will be approximately 1.443 which coincides with the 38.2 fib retracement on the week’s range and not far off monthly M2. Should prove some pretty tough resistance eh.. and I can’t see any seriously positive Brexit polls emerging in the near future to alter the bearish GBP sentiment –

      In fact there was another ORB survey a few minutes ago showing 55% for brexit and it’s sent GBP plumetting again.

      Might not need that resistance!!

  2. Dalmas Ngetich - FOREX.TODAY says:

    Evans it is indeed interesting, that break below the support trend line on Friday caused a selling frenzy!! I see this pair plunging to the 161.8 Fibonacci level drawn from last year’s Hi-lo which is also a February support before the polls which i think will be pro euro despite what all “surveys” and “polls” suggest, I’m also buying gold..want to ride with the demand caused by this Brexit vote.

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