Ongoing “Brexit” worries that have negatively impacted the British Pound, since the announcement of a summer referendum on staying in the EU have pushed GBPUSD still lower into late February. The break below the psychological target at 1.4000 has pushed Cable (GBPUSD) to its lowest level since 2009 and leaves bias for further downside into March.
Furthermore, although not in a bear trend, EURUSD losses have neutralized the bullish set up from early February and sees a negative bias now to a range theme into latter Q1.
Despite a bounce Friday to probe just above resistance at the 1.4034 level, the bearish outside pattern setback to another new cycle low to hit our 1.3865 target Friday, leaves bias lower again Monday.
- We see a downside bias for 1.3815, 1.3770 and maybe 1.3725.
- But above 1.3940/45 opens risk up for 1.3990 and maybe 1.4043, which we would look to try to cap.
Short/ Intermediate-term Outlook – Downside Risks:
- We see a negative tone with the bearish threat to 1.3656.
- Below here targets 1.3504/00.
What Changes This? Above 1.4409 eases bear risks; through 1.4578 signals a neutral tone, only shifting positive above 1.4668.
Daily GBPUSD Chart
Monthly GBPUSD Chart
As expected, upside was limited Friday by 1.1093 (by 1.1068) and the push down through our next target at 1.0956/51 close to 1.0902 for a bearish outside pattern is enough to shift the intermediate term outlook to neutral. This also leaves bearish risk for Monday.
- We see a downside bias through 1.0902; break here aims for 1.0882, 1,0838 and maybe 1.0808.
- But above 1.0980 aims for 1.1030, 1.1068 and opens risk up towards 1.1093, which we would look to try to cap.
Short/ Intermediate-term Range Parameters: We see the range defined by 1.0777 and 1.1157.
Range Breakout Challenge
- Upside: Above 1.1157 aims higher for 1.1376/95 and 1.1495.
- Downside: Below 1.0777 sees risk lower for 1.0708 and 1.0520.
Daily EURUSD Chart