Pound Is Still Afraid of BrexitEarly in the summer of 2020, the British Pound is slowly growing against the USD, which is quite good after a depressing previous week. At the beginning of June, GBP/USD is mostly trading at 1.2403.
The Brexit negotiators got into another “ambush”, where their dialog stopped. The United Kingdom earlier announced that in order to agree on the trade deal with the European Union, the parties had to resolve fundamental contradictions. In June, the British Prime Minister Boris Johnson will personally chair the talks and one can be absolutely sure that they will be more aggressive and energetic.
London insists that all topical issues must be decided during the transition period, because the extension of the period will impose additional obligations on the United Kingdom, including financial.
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As we can see in the H4 chart, GBP/USD is forming the structure of the fifth ascending wave towards 1.2450. Possibly, after reaching this level, the pair may correct towards 1.2262 and then grow towards 1.2360, thus forming a new consolidation range between these two levels. If later the price breaks the range to the downside, the market may resume trading downwards to reach 1.2200; if to the upside – start another growth with the target at 1.2490. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving inside the histogram area, which implies further growth. Only after the line leaves the area, one may consider a new correction on the price chart.
In the H1 chart, GBP/USD also continues forming the fifth ascending wave. By now, it has reached the short-term target of this wave at 1.2400. Possibly, the pair may correct towards 1.2325 and then grow to complete the wave at 1.2450. After that, the instrument may resume falling to return to 1.2325. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is falling to break 50. After that, the line may continue moving to reach 20 and then start a new rising movement towards 80.
By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.