FХ Strategist & Financial Commentator
During the last two weeks, Cable has literally collapsed, with a drop of around 1800 pips and the quotes to mark a new historical bottom around 1.14 area breaking the major support generated nearby 1.1780 after the Brexit Referendum.
On last Friday’s session, by the way there was a strong recovery of the pound with a temporary comeback around 1.19, before a quick correction and a weekly closure at 1.1640 area.
The average true range is currently rising, even though the 2016 record set after brexit vote is still far away.
Looking at the RSI indicator, we can see how it fell below the oversold area for the first time since August 2019. Considering how 1.16 / 1.17 area represents a strategic support for this pair, in my opinion for the next few weeks, GbpUsd could try to build a bullish base around these quotes.
Anyway, in order to have a concrete setup, we should wait for a weekly bullish candle, to confirm the bullish divergence that we can detect on the monthly chart. In this case, we can expect a medium term recovery for the Pound with a potential target price around 1.27.
As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to Nbh YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.