The Uncertainty Around Brexit Makes Trading GBP/USD Riskier

The GBP opened the new trading week with a considerable gap of 170 pips, which shouldn’t be a surprise, considering the rumours that the UK is preparing to leave the single market, the Customs Union and the jurisdiction of the European Court of Justice. The British prime-minister is expected to make a speech before the Parliament on Tuesday, clarifying the government’s intentions about a “hard exit” from the EU.

From a technical analysis point of view the GBP/USD pair is in a key zone of support around 1.20 – 1.21, which could prove quite strong.

For the moment the pair is stuck in a relatively tight range around the support zone. Whether the market participants will attempt to recover the gap or not depends, I think, on what will be said in the UK Parliament tomorrow.

For the moment trading this pair is quite risky, because it is strongly dependable on the political and economic factors relating to the UK status in the EU and the expectation for a “hard exit” policy of the British government.

The GBP/USD Range Continues

In the past few weeks the British Pound has been a currency that is not easy to analyze from a technical analysis point of view, since it depends on the fundamentals, i.e. on politics, so much.

It has been a little over a month since 23^rd June, but GBP is still at the same historically low levels after it fell to 1.3226 in that night and a few days later it reached 1.2788.

Ever since then GBP/USD has been trying to form a correction, but the pair couldn’t reach higher than 1.3480 – and that level was achieved only briefly.

In the past two weeks GBP/USD has been moving in a relatively tight range between 1.3290 and 1.3060. The reason is obvious for everyone – no one dares to risk buying this pair, which depends so much on politics at this stage. The braver traders have only one way out and it’s trading the range. From a purely technical view, the expectation is that the pair will continue moving for about 230 pips in either direction in case the range is broken. And no one can really make an accurate prognosis in what direction that breakout will happen.

After Brexit Most Instruments Are Trying to Find a Direction

The news that the UK will leave the European Union caused chaos and panic on the financial markets, and they still cannot recuperate from that.

Most instruments (currency pairs, metals, commodities, indexes and stocks) are in range that has continued for almost a week now.

The markets are trying to find a direction and at the moment it is unclear whether that will happen anytime soon, especially considering the fact that whatever decisions are made will be made in September at the earliest, because yesterday the EU gave London a two months respite to make the first steps to leave.

Not to mention that respite coincides with the summer season, which is at the beginning of its height in the Northern Hemisphere, and during this period the markets are generally a lot less volatile.

With all this in mind I would say that traders are facing a lot of uncertainty during this summer and in my opinion it will be best to do intraday or very small time frame trades. At the moment it is very hard, even almost impossible to make a long-term prediction about the direction of the various instruments.

The Unthinkable Happened

Even yesterday no one could believe that the British voters would choose to leave the European Union.

Everyone thought that such a move was unthinkable and investors were favouring the long positions for the GBP. Unfortunately, towards the end of the day the enthusiasm drained away and in its place panic set in, after which the GBP started crashing.

The British currency dropped with 1800 pips for eight hours, reaching the historical low at 1.3226, which is its lowest level since 1985.

It is difficult to say what we can expect from now on. At the moment the chart is not offering any sort of technical analysis clarity, nor are the markets offering any fundamental analysis clarity. I hope that in the following days things will become clearer and we will be able to find new entry points for this currency.

In the Eve of Brexit EUR/USD Is Barely Moving in a Tight Range

Tomorrow is the big day that everyone in the EU, and frankly, many people outside of the EU, have been anxiously expecting for a long time now. What will be the British people’s choice?

Will they remain a part of the big European family or will they leave it? There are thousands of articles and comments made in all media about this.




I think that to attempt to make a technical analysis of EUR/USD as well as other EUR and GBP pairs is pointless today.

Tomorrow the movements of these pairs will be decided by the voters.

All we can do right now is to wait and see what the British citizens will decide.

In my opinion, there will be massive volatility in both directions.
I, personally, will refrain from trading and instead I will relax for a day while waiting for the market to decide on its direction. I wish everyone who do intend to trade success and I hope you will be careful while doing that.