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Sterling Takes a U-Turn as Bears Continue to March

The Great Britain Pound traded higher at the start of the new week as it adds to Friday’s relief bounce that closed a run of 13 consecutive days of losses. One of the reasons for the Pound surging after May stated her resignation was that it decreases the ‘uncertainty’ over May’s future.

The GBP/USD rate is trading at 1.2700 at the beginning of the new trading week, slightly higher than the week before as Sterling vulnerability turned to strength following the resignation of Prime Minister Theresa May, leading to a U-bend in the downtrend.

 

The technical illustration is also pretty bearish: the pair is in an established and intact downtrend which is likely to continue. GBP/USD tested 1.2745, the double top resistance level. The 50 periods EMA also stays at the spot and may push the Sterling lower. GBP/USD has also formed a bearish engulfing pattern on the 4-hourly charts, which is further adding to Sterling’s bearish bias.

GBP/USD – Trade Idea
The idea is to stay bearish under 1.2740 with a stop loss above 1.2765 and take profit of around 1.2615.

Good luck!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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