GBP/USD Remains Bearish in the Short Term as MAs Turn Into Resistance
[[GBP/USD]] turned massively bullish earlier this month after the Brexit deal was reached between the EU and UK Prime Minister Boris Johnson. As a result, this pair surged around 800 pips higher and broke above 1.30 for a brief moment. But, the price pulled back down below that level pretty quick, so the break doesn’t count yet.
The Brexit deal didn’t pass the meaningful vote in the British parliament and last week this pair started retreating lower. Although, we weren’t sure whether the trend had changed. But, given the fact that moving averages were turning into resistance for this pair, it became increasingly clear that sellers were waking up after the big surge earlier this month.
So, we decided to sell this pair yesterday at the 100 simple MA (green) which has turned into resistance on the H1 chart, as you can see above. That moving average pushed the price lower all night and this morning sellers gave the final push. The price broke below the 100 smooth MA (red), but it’s still standing pretty close to it. So, the break is not clear yet, although we booked profit on our trade.
The 20 and 50 SMAs have turned into resistance on the H4 chart
If you switch to the H4 time-frame, the 20 SMA (grey) and 50 SMA (yellow) which were providing support on the way up have now turned into resistance, so that chart setup points down. Although, Brexit will decide how this pair will behave. Right now, the situation is unclear in the UK, so the GBP is retreating slowly lower.
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