Review and dynamics
Information in Mass Media that Prime Minister of Great Britain Theresa May has engineered agreement of the Parliament for Parliamentary voting for her plan of the exit from the EU, has provoked sharp rise in the pound at today's Asian session.
On Tuesday the pair GBP/USD fell by 240 points or 11% to the Monday’s closing level of 1.2120. Today, the pair GBP/USD has managed to regain by 0.4%, up to the level of 1.2320.
However, despite today’s rise in the pair by 150 points at the beginning of the European session, the pair is likely to decline to level of 1.2000 by the pressure of fundamental factors. On the weekly chart the pair GBP/USD is in the descending channel with the lower limit below the level of 1.1800.
On the daily chart a new descending channel has been formed with the lower limit, which crosses the level of 1.1850. In case of the further decline in the pair GBP/USD, new targets will be at the levels of 1.200 and 1.1850. On the daily, weekly and monthly charts the indicators OsMA and Stochastic give sell signals.
As the result of the continuing decline in the pair since the beginning of September, the pair GBP/USD has broken all support levels and continues to decline in the strong bearish trend. The decline in the pair is likely to continue without sharp rebounds until new positive momentum.
The pair can undergo short-term correction up to the levels of 1.2395 and 1.2615.
Further correction in the pair is also possible. The pair can reach the level of 1.2900 (ЕМА200 on 4-hour chart and Fibonacci 0% after the decline in the pair from the level of 1.4860 before Brexit).
Meanwhile, short positions are preferable. Traders shall also remember to place stop-loss orders.
Support levels: 1.2255, 1.2200 and 1.2120.
Resistance levels: 1.2325, 1.2395, 1.2465, 1.2615, 1.2715, 1.2795, 1.2875 and 1.2900.
Sell on the market. Stop-Loss: 1.2325. Take-Profit: 1.2200, 1.2100, 1.2000 and 1.1850.
Buy Stop: 1.2335. Stop-Loss: 1.2275. Take-Profit: 1.2400, 1.2520, 1.2615, 1.2795 1.2875 and 1.2900.
In the descending channel
The nearest support level is 1.2120