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Weekly Recap for Pound Sterling: December 7-13GBP/USD The key event of the 7th December week for GBP/USD was Brexit trade deal talks between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen during dinner in Brussels on Wednesday, 9th December. The official statement of both sides remaining ‘far apart’ after the end of the dinner increased selling pressure behind cable on Thursday and Friday. GBP/USD opened the week of 7th December at 1.3409 and took a downswing of 193 pips between 6:00 and 10:00 UTC. Later in the day, high-level volatility continued, and the pair managed to recover much of the losses, closing Monday’s session at 1.3375. On Tuesday, 8th December, the pair continued slipping downwards and edged down to a local low of 1.3289 mid-day. The losses were largely retraced later in the day, with the pair closing Tuesday at 1.3350. The expectation of a breakthrough in the Brexit trade deal kept up the pound bulls’ hopes, which resulted in GBP/USD rising to 1.3478 during the day. But all of that positivity was largely reversed by the negative news coming from Brussels. On Thursday, 10th December, the falling continued, regardless of the positive U.K. manufacturing and industrial production figures and the U.K. month-on-month GDP for October matching the 0.4% change expectations. On Friday, 11th December, PM Johnson’s warning of no deal alarmed the traders even further, and the selling continued on. As a result, the pair slipped under the 1.3143 daily support level for a short time, but bounced quickly to 1.3180, being supported by the level and the 50-day SMA. Later in Friday’s trading, cable even jumped above 1.3250, but was unable to hold the local gains and secured a place at 1.3218 at the week’s close. The week’s trading result for GBP/USD increases the risks of a discontinuation of the uptrend on the daily timeframe from the technical point of view. The fundamental picture behind the Brexit trade deal remains the main driver of such risks. It was announced in Brussels that the talks would continue through Sunday, and some uncertainty concerning the final situation around the trade deal remained in the market. On Monday, 14th December, Boris Johnson and Ursula von der Leyen jointly stated that they had discussed the key unresolved issues and decided ‘to go the extra mile’ to reach a historic trade deal. The market’s reaction was extremely bullish, with the GBP/USD opening with an upside slippage of 127 pips and reaching 1.3380 in the first eight hours of Monday, virtually writing off the previous week’s losses. The U.S. and U.K. economic reports during the week of 14th December will be many. The most important one will include: the U.K. unemployment data and average earnings for November on Tuesday; the U.K. CPI, the U.K Services PMI and Manufacturing PMI, the U.S. retail sales, the U.S. Manufacturing PMI, the U.S. Services PMI, the U.S. PMI Composite on Wednesday; the Bank of England’s interest rate decision on Friday. Also, a COVID-19 vaccine announcement is scheduled to be made in the U.S. on Friday, 17th December. Presently, the 1.3143 daily support level remains the downside target for GBP/USD, its attainment may be foiled by the upside channel’s lower boundary, which has already several times prevented cable from slipping outside the channel. However, if pessimism continues to dominate the Brexit trade deal arena, the discontinuation of the uptrend in the pair only seems to be a matter of the nearest future. EUR/GBP For GBP/EUR, the week of 7th December was a straightforward bear run, from mid-1.1000s to 1.0850. The failure to yield a breakthrough at the dinner in Brussels damaged the pound’s positions against the rivals, most noticeably - against the euro. Having opened the week of 7th December at 1.1063, GBP/EUR travelled below 1.0950 in the early Monday’s hours, but recovered most of the losses during the rest of the day, closing Monday’s session at 1.1050. On 8th December, Tuesday, Monday’s trading situation largely replicated itself at a lesser scale. Having opened the session at 1.1045, GBP/EUR edged down to 1.0969 but returned to 1.1034 at the day’s close. Tuesday’s mixed trading was partly explained by EU’s GDP data: a negative 12.5% change against the 12.6% market forecast and the positive -4.3% year-over-year change against the -4.4% market forecast. On Wednesday, 9th December all eyes were fixed on Brussels, where the talks between British PM Boris Johnson and European Commission President Ursula von der Leyen were taking place. As was announced after the end of the talks that both sides remained ‘far apart’, GBP/EUR got stuck under the 1.1100, being pressured by the 1.1093 weekly level and the 50-day simple moving average. The market’s reaction on Thursday, 10th December, was highly negative: a long bearish candlestick took the pair from 1.1089 to 1.0948 at the day’s close. On Friday, 11th December, the pair opened at 1.0954 and, pressured by the British PM Johnson’s rhetoric of a high chance of a no-deal Brexit, touched the low of 1.0835 in an 8-hour-long downswing between 6:00 and 14:00 UTC. A bounce from the weekly low took the pair above 1.0900 and saw it close the week at 1.0913. The week’s dynamics indicated a downside target of 1.0795 for GBP/EUR, but the bullish comments from the negotiators in Brussels have changed it for an upside one at 1.1250. The announcement of a new round of negotiations made by PM Boris Johnson and European Commission President Ursula von der Leyen with determination to resolve the key issues and reach a trade deal sent the pair above 1.1030 and the 50-period SMA on the 4-hour timeframe by 08:10 UTC. Besides the situation developing around Brexit trade deal negotiations, the week of 14th December is rather tightly packed with economic reports. Aside from the British ones, the key EU reports to watch for GBP/EUR include: Manufacturing PMI, Services PMI and PMI Composite on Wednesday and CPI on Thursday. The renewed hopes of a trade deal between the EU and the U.K. have given the GBP/EUR a bullish stimulus. Therefore, a deal in place could easily send the pair above the 1.1250 resistance level. The announced new round of negotiations should soon give final clarity for GBP/EUR trading dynamics.
by KonstantinAnissimov
2
EURGBP: Catching Bullish Swing EURGBP has broken and closed above a resistance line of a major falling channel on a daily. The area between the last lower high and a broken channel's resistance now serves as the major demand zone. Yesterday the price has retested that and we saw a positive bullish reaction. From that area, a strong bullish wave will be expected. The next goal for buyers is 0.9128 For intraday traders, the best option is to look for an entry on a lower time frame (4h/1h)
Long
by VasilyTrader
15
GBPUSD emerging from years long bear trend and going back upBritish Pound/USD is giving us signs that we might begin to see a reversal to the bear trend that has lasted for 13-14 years. 1Y TF white energy is just starting to move up and about to cross the 50 mid-line. Unlike in 2014, where the white energy failed to move above 50 and dropped back down along with green line as the price stair-stepped down, this time the red RSI is at a much lower position where the green line and the white energy may not bounce off of it again, and I think there is a decent chance we may see the white energy go above 50 mid-line in the next 1Y candle. In the meantime, in the lower TFs such as 6M and 4M, we are seeing signs of a budding upward momentum brewing as the price started going back up and above weekly 200 EMA that we have been trading under for almost 7 years now. It is likely to see GBP continue to appreciate for several more months before any mid-long term, months-long correction phase is to take place. In the long term I personally believe that we are going to continue to see the price go up. For a long term investor, it may be a good time to started moving your assets into GBP seeing it has the potential to continue to rise in value. Alternatively, one could wait until the 1Y white energy crosses above 50 for confirmation of upward momentum before getting in. FOREX markets aren't necessarily a playground for scalpers; one could very well do swing trades with GBP. At this point, for the foreseeable few months, I do believe we are at a spot where a mid-long term swing long would be profitable.
Long
by Popovich
GBPCAD: Planning Short Entry After Breakout GBPCAD broke and closed below a support line of a parallel channel on 4h last week. Yesterday the price had retested the broken channel and was heavily rejected. Now on hourly, the price is stuck between a channel's support and 1.735 minor structure. This area serves as a local supply zone. To short wisely I will wait for a bearish violation of yellow support (1H candle close below). Then we can initiate short with 1.73 first goal. in case if the price returns back within the boundaries of the channel, setup will be invalid
Short
by VasilyTrader
9
Weekly Recap for Pound Sterling: November 22-29GBP/USD GBP/USD opened at the pre-market of 23rd November at 1.3289; in Monday’s session the pair was rising strongly in the first part of the day and reached the day’s peak at 1.3398 between 13:00 and 13:15 UTC, being backed by positive U.K. preliminary November PMI figures. The manufacturing PMI was at 55.2 against the 50.2 market forecast, the services PMI was at 45.8 against 42.5, signaling a positive trend in the U.K.’s economy. However, cable fell sharply between 14:00 and 17:00 to 1.3264 against the backdrop of positive U.S. preliminary November PMI figures: the manufacturing PMI was at 56.7 against 53, the services PMI was 57.7 against 55.3. But the hourly candlestick between 16:00 and 17:00 UTC closed in a dragonfly with a long tail, providing a foundation for a bounce, which began right at 18:00 UTC, continuing in the late hours of Monday’s trading session and into the early Tuesday’s hours. Climbing steadily up, the price reached 1.3339 at 8:00 UTC on Tuesday, 24th November, and rose to 1.3380 in less than two hours. But the gains did not hold, and the price slipped below 1.3300 from 9:00 to 15:00 UTC. But the local support level at 1.3294 sent the price up to the midrange of 1.3300 – 1.3400, where the pair continued trading until the end of the day. On Wednesday, 25th November, several comments relating to a possibility of a no-deal Brexit were made on both sides of U.K. – EU negotiations. That rhetoric transiently sent the price lower, but the market largely shrugged it off later in the day, continuing pricing in the probability of a no-deal Brexit as low. Eventually, cable closed Wednesday’s session at 1.3383. With the lack of any important economic reports on Thursday and Friday, GBP/USD continued trading technically and with regard to Brexit-related developments. Michelle Barnier – the EU’s chief Brexit negotiator – arrived in London on Friday, 27th November, for in-person talks with the U.K. side. The rhetoric continued mixed on Friday. The U.K. PM Johnson said that Britain would prosper with or without a trade agreement with the EU; the U.K. chief Brexit negotiator David Frost insisted on the EU accepting the U.K.’s control over its fishing waters; Mr. Barnier himself was quoted as saying that he did not know if a deal was possible at this stage. The chief result of Friday’s negotiations was Mr. Barnier’s plan to propose 15% to 18% of the fish caught in U.K. waters to be restored to the U.K. under the free trade agreement. The market expressed its concern through downside dynamics prevailing in GBP/USD in the last two days of the week. The price edged down to 1.3330 on Thursday but recovered to 1.3350 near the close. On Friday, downside dynamics took the upper hand, driving the cross rate near the level of the week’s open. As a result, cable finished the week of 23rd November at 1.3305. The week’s dynamics show the market’s mixed attitude on the ongoing developments in Brexit trade deal talks. The GBP/USD cross rate looks quite stout above 1.3300, the dipped below the 50 period simple moving average at the week’s close. The cable’s uptrend of the last few weeks remains intact. By the look of it on the daily chart, a slight price downslide looks probable and can be considered healthy. Much of the GBP/USD price development during next week will depend greately on Brexit trade deal talks development. Judging by the rhetoric and Barnier’s proposal on fishing waters, it seems that a positive outcome remains a preferred option for both sides, which leaves good hope for cable bulls. Also, new COVID-19 cases are continuing to trend down, and with the expiry of the nationwide lockdown on 2nd December London will return to the less strict Tier 2 regime. As for economic reports in the week of 30th November, there will only be the final November manufacturing PMI for the U.K. on Tuesday, 1st December; for the U.S., there will be the final November manufacturing PMI on Tuesday, jobless claims and final November services PMI on Thursday, 3rd December, and nonfarm payrolls on Friday 4th December. GBP/EUR Opening the week of 23rd November at 1.1218, GBP/EUR rose above the 1.1265 resistance level that was set on 3rd September 2020 and to the week’s high at 1.1278 between 15:00 and 16:00 UTC, being supported by the aforementioned upbeat U.K. preliminary November PMI figures and downbeat November PMI data from the EU, namely services PMI at 41.3 against the 42.5 market forecast and composite PMI at 45.1 against the 45.8 market forecast. Later on Monday, the price stabilised and closed above 1.1250. With nothing notable happening on the front of economic data both in the U.K and EU for the rest of the week, the GBP/EUR price rate dynamics were dominated by the rhetoric coming from the Brexit front and technical factors. On Tuesday, 24th November, the pair continued sideways above 1.1250, temporarily rising above 1.1260. However, later in the day, the price edged lower to 1.1220, then rose back above 1.1250 but only for a few minutes and continued lower in the evening hours of the day, slipping to 1.1231 at the day’s close. The downside price action continued into Wednesday, with the pair sinking to 1.1190 at a local low between 11:00 and 12:00 UTC. A local recovery took the GBP/EUR pair to 1.1240 between 14:30 and 15:30 UTC but only temporarily, with the price being pressured by 50 and 20 periods’ simple moving averages. The GBP/EUR cross rate remained largely capped under the two simple moving averages for the rest of the week, which, coupled with the mixed and downbeat Brexit rhetoric, eventually led the pair to a substantial price loss on Friday, 27th November. GBP/EUR was holding above 1.1200 until 10:00 UTC on Friday but was driven to 1.1170 in the next hour and from 1.1171 to 1.1119 between 16:00 and 17:00 UTC and closed the week at 1.1132. The uncertainty around the Brexit trade deal was weighing heavily on the British pound during the week of 23rd November, being the primary motive force for GBP/EUR. Having slipped well below the 50-period SMA on the 4-hour timeframe on Friday, the pair risks going into a downside phase of price development. The uptrend on the daily chart still looks intact, but if Brexit pressure continues to weigh on the pound during the week of 30th November, there might be a series of serious losses in store for GBP/EUR. The 1.1093 weekly support level is likely to be tested during the week of 30th November. Besides the Brexit trade deal, a package of important economic data from the EU will also shape the fundamental situation around GBP/EUR during the week of 30th November. On Tuesday, 1st December, there will be published the U.K.’s November manufacturing PMI and the EU’s preliminary CPI for November; on Wednesday, 2nd December, the EU’s unemployment rate will be released; on Thursday, 3rd December, the EU’s October retail sales, and November PMI composite will be released.
by KonstantinAnissimov
GBPUSD: Key Level Ahead!!! GBPUSD is approaching a major weekly/daily structure. 1.338 - 1.348 is a strong supply area. Chances are high that we will see at least a pullback from that. Our confirmation will be a bearish breakout of a rising wedge pattern (can be identified on 4h-10h charts). Wait for a confirmed violation with multiple candle closes outside that before you short. Goals will be 1.32/1.3125 (in case of a daily candle close above the zone, setup will be invalid)
Short
by VasilyTrader
36