Overview:- By looking at the daily chart we can see that bears are rocking and it seems like they are in party mood. The pair has topped out and shown a sharp free fall from 0.9000 to 0.8433 level without any hurdle. Well it is just a starting we may see further selling in the pair till 0.8293 level which is low of april 2017, presently pair is trading at multi year’s low.
Fundamental Analysis :– The GBP seems further strong so we may see further downside momentum in the pair. The GBP has regained upside pressure as of late against the backdrop of deteriorating expectations around a Brexit deal and heightened effervescence in the UK political arena.
Non-farm payrolls are predicted to rise 180,000 in Nov following Oct’s 128,000 increase. The unemployment rate is expected to be unchanged at 3.6%. Hourly earnings will gain 0.3% in Nov after October’s 0.2% increase and annual earnings will be stable at 3.0%.
Technical Analysis :- From technical prospective we can see that the pair has breached a strong key support level of 0.8500 and given daily closing below the mentioned breakout level which has created further weakness in the pair.
The primary trend is down and secondary trend is also down so in a downtrend market always sell on high will be profitable strategy. The pair has given weekly closing very negative i.e. bearish marabuzo candlestick this week although previous weekly candle was also bearish marabuzo candlestick from where we are receiving down side signal and a downtrend line is also lying on the chart which is proviidng us sell signal. . The pair was making successively lower lows and lower highs. The MACD indicator is showing the bearish crossover which is a recent development on the daily chart whereas RSI turned back to downside from oversold territory.
What Next:– The way bears have snatched the bite from bull’s mouth and bears are dominating the bulls it seems like bears are approaching the 0.8300 level in short term. Odds are in favor of bears and we will keep our bias bearish on the pair as long as 0.8700 level remains intact on closing basis. The 0.8650 level is immediate resistance level followed by 0.8750 level whereas the 0.8300 level is key support level followed by 0.8250 level.
Trade idea:- Based on chart and studies above we can suggest to our traders and investors that go for short at 0.8460-50 level for the target of 0.8400 and 0.8300 level with the tight stop loss of 0.8680 level.
