Basic information
The Pound spent a week suffering the heaviest losses of the year despite the optimistic signals from Brexit voting of the British Parliament.
After the general election, GBP / USD dropped more than 300 pips last week, making a strong reversal from the highest level in the past 19 months, after rising above 1.3500 the previous week. This could be the profit-taking pressure from the market after previous hot gaining momentum.
Speculators may have been profitable after significant gains of the pound before and right after the announcement of general elections in the United Kingdom. The collapse of the GBP was exacerbated amid concerns about a "hard Brexit" following Prime Minister Boris Johnson's decision to rule out the possibility of extending the transition period after December 2020.
This week is expected to be a quiet week of the market. Trading volume is likely to be low during holidays. Economic calendar has some information released. On Monday in the US, the Durable Orders report is published. The impeachment of Trump and the negotiations between the United States and China are the main drivers of the market.
In the United Kingdom, the wall is focused on the Brexit process but for Prime Minister Borish Johnson, there seems to be nothing to stop Britain from leaving the EU before January 31. about future relationships. Investors who bought up the GBP due to a big victory in Johnson's election, became more gloomy this week, when he introduced the bill that the transition period cannot be extended. Brexit or hard Brexit will greatly affect the UK and Europe economy.
Technical analysis
However, there are many optimistic factors on the technical chart. After falling sharply to the support zone and also the psychological threshold of 1.3, GBPUSD leveled off. This may be a sign of speculation before speculators gather a new buying force. But it could also be due to the holiday effect. The 1.3 level is a reasonable area to buy in at the moment. However, it is possible that the increase will not be strong. On the other hand, if the support breaks 1.3, the next target may fall further to 1.26
REFERENCE STRATEGIES
Buy 1.3
Stop loss 1,293
Profit taking 1.315-1.332
Recommendation: This is just a Trading Idea. For more accurate analysis, you should incorporate other indicators that you have mastered. In particular, always focus on capital management methods to prevent any possible market situation.
Author: Nguyen Chi Thanh
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