GBPUSD Make or Break (Jun 21, 2017)

Cable is sitting right on the ascending channel support visible on its daily time frame. A bounce could take it back up to the resistance at the 1.3250 minor psychological level while a break could spur a longer-term selloff.

The 100 SMA has just crossed above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In addition, the moving averages are close to the channel support at the 1.2750 minor psychological level, adding to its strength as a floor.

Stochastic is treading lower but is approaching the oversold area to indicate weakening selling pressure and a potential return in bullish momentum. 

Brexit risks are currently weighing on sterling these days as the UK government could get pushed around by EU officials. Note that PM May has yet to strike a coalition with the DUP to have a stronger front. The upcoming Queen’s Speech could restore some confidence in the UK government and economy, which might be bullish for the currency.

As for the dollar, the recent slide in equities could dampen its gains once more as markets don’t seem to be impressed by the Trump administration’s push for fiscal reform. While FOMC member Dudley gave a hawkish testimony, other policymakers like Evans don’t seem to be as upbeat.

By Kate Curtis from Trader’s Way