Sterling headed down toward support level
Updated
The recent break to the upside from a wide triangle formation has seen a significant, but common, pushback which seems to be headed back towards the line of breakout. A touch of the 200 day MA seems in order and then a test of the support area around 1.435
The Pound could break through support and head back down into the channel, targeting the 0.618 fibonacci extension from the possible corrective ABCD-like pattern that would form. In general, given the "brexit" hurdle I think it is plausible to assume a push down of the pound heading towards the vote, the outcome of which will certainly have the last word on the sterling's destination (and the euro for that matter).
Alternatively, a strak of weak US economic data and a continued dovish stance from the FED could cause the pound to bounce on that support and continue it's uptrand.
The Pound could break through support and head back down into the channel, targeting the 0.618 fibonacci extension from the possible corrective ABCD-like pattern that would form. In general, given the "brexit" hurdle I think it is plausible to assume a push down of the pound heading towards the vote, the outcome of which will certainly have the last word on the sterling's destination (and the euro for that matter).
Alternatively, a strak of weak US economic data and a continued dovish stance from the FED could cause the pound to bounce on that support and continue it's uptrand.
Note
Very interesting: the price has bounced twice over that support level and then, instead of falling as I was expecting it shot up through the roof. This happened for a specific and very clear reason: an important poll came out predicting only a ~20 ish % of probability of a brexit! That came as a huge surprise (albeit we had a few days of continued small losses to the pro brexit side before this).Wow... what a remarkable event. Now the question is, will this just dissipate on a future contraddicting poll news? There's no way to know really
Note
On the other hand, analysts generally say that the Sterling has to come down no matter what. So that even with a no brexit scenario they see a short term rally of the pound followed by the continuation of the major long term downtrend... The uk in general likes to see a weak pound, but the BoE has to hike rates at some point after brexit.
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