At the end of the day, Pound remains unchaged. Gold tooYesterday we had a real roller-coaster on the GBP. Well, no surprise here as we had a Brexit vote and everybody expected the increase in volatility.
The outcome was rather random but at the end of the day, the price made it’s most popular move so a significant movement in one direction and then, total retracement and a come back to the previous levels. Been there, done that on many occasions: interest rates decisions, NFP data etc.
GBPUSD broke two important supports. First one was more local one – 1.2815 (orange) and the second one was the long-term one – 1.272 (blue). The breakout of the first one was temporary and the breakout of the second one was a fake one and happened only in the short-term. At the end of the day, the price reversed and as long as the GBPUSD stays above the orange line, we do have a buy signal.
EURGBP had a great sell signal before the vote as the price broke the lower line of the rectangle pattern. Tuesday volatility brought us a test of the lower line of the rectangle, which ended with a bearish bounce. Wednesday starts with the new weekly lows, so the sell signal is intact.
How in this whole situation behaved Gold? Steady. The price did not move much. In general, we are in the ascending triangle pattern, which is promoting a further rise. Most recently, the price is locked inside of the pennant formation(green lines). In my opinion, we should soon see the test and the breakout of the orange horizontal resistance.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis