GBP/USD turns red for the year

It is never a good sign for the markets to go from green to red on anytime frame. So the fact that the GBP/USD has now turned red for 2018, falling below the opening price of 1.3500, the bias has turned bearish.

It is never a good sign for the markets to go from green to red on any time frame. So the fact that the GBP/USD has now turned red for 2018, falling below the opening price of 1.3500, the bias has turned bearish. Admittedly, the year has just started and the overall trend still looks bullish, with the main moving averages for example all pointing higher, as shown on the chart. However, as things stand, the short-term trend has turned negative and we have to put our longer term bullish views on hold for the time being. If and when the GBP/USD goes back above the yearly open price then this would objectively re-establish the bullish trend. The GBP/USD bears now need to see a clear breakdown in the market structure of higher highs and higher lows. The last low was made at 1.3305. So, if this level eventually breaks then we will have more confirmation about the trend change. Meanwhile it is worth pointing out that the momentum indicator RSI is currently in a state of negative divergence, too. What’s more, price is also residing near long-term resistance levels circa 1.35-40 zone. Thus, taking everything into account, the GBP/USD looks set to fall further. But as mentioned we will quickly change our view in the event price pops back above the 2018 opening price of 1.3500, or if we see a significantly bullish pattern at lower levels first. Friday’s release of US CPI and retail sales should have a big impact on the dollar, and in turn the GBP/USD pair, in the event the data deviates meaningfully from expectations.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account