Technical Analysis

Sterling loses some ground as traders digest aftermath of Brexit votes this week

Cable falls to a low of 1.3203


Price has now moved lower to challenge a key near-term support area around 1.3216, which previously held up twice yesterday. There’s also light bids sitting around the 1.3200 handle so that could help to stall the drop for now but if price breaks below that, I would expect sellers to challenge the key hourly moving averages next.

After suffering two key defeats this week, May finally got a win yesterday – albeit a narrow one – as parliament voted down all other amendments while passing the motion to extend Article 50. That means we’re now headed towards yet another meaningful vote (MV3) next week.

The key thing to focus on now for the pound will be whether or not May can turn the tide and gather enough support for the meaningful vote this time around. But unless we get more headlines on that, expect more choppy trading in the pound and price to settle in this deadlock area above the key hourly moving averages but below the 1.3300 handle.

I reckon price action will sit around these levels until we get more clarity in the days to come. Tick tock, tick tock. Brexit o’clock is approaching.


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