Is this the calm before the storm?!?
What is going on with GBP right now?
Well after a very eventful few weeks where the market was inundated with BREXIT news with debates, arguments, updates with twists and turns as to whether the UK would or wouldn’t leave the European union with or without a deal, the GBP went on a massive bullish run against all of its counterparts it trades against.
GBP/USD rose from the levels around 1.2250 and within 8 trading days hit 1.3000, a strong 750 PIP bullish move without hardly looking back to form much of a retracement as the bulls stampeded higher full steam ahead.
But what has happened since? Once we saw price hit the 1.3000 Key monthly resistance level, we have seen price start to retrace and take a breather after lunch a long run. Things have gone a little quiet with GBPUSD and this can be relayed to hardly any fundamentals over the past week to affect this pair.
However! Tomorrow is a big day for GBP, and we can expect the volatility to return. Tomorrows economic calendar gives the BOE (BANK OF ENGLAND) monetary policy report at 12 PM UK TIME along with Monetary Policy Committee members rate vote and then we have the governor of the BOE Mark Carney speak shortly after!
This could potential be the catalyst this market need to make its next move. On my chart we can see how price has slowed down with a range and now forming a triangle formation which barriers will act as support and resistance and sure to come into play tomorrow.
We have seen a very strong bullish run prior to this triangle forming so the momentum is still on the bulls side but to confirm the next direction we need a break of the triangle formation. A break higher would easily see 1.3000 retested and then the next upside target would be at 1.3080 and then 1.3170.
Downside target if we can see momentum shift is firstly 1.2790 but should this break, it could mean lots of downside for this pair!
Definitely one to keep an eye on today and tomorrow!!!