GBP/USD Common or Breakaway Gap?
Talks about hard Brexit over the weekend, hit the pound hard. UK PM Theresa May is set to make a keynote speech on Brexit on January 15. The pound could be very volatile and any mention of hard Brexit will additionally hit the pound.
Technically we can spot a retail gap that was formed over the weekend and the gap hasn’t been closed yet. I see this either as breakaway gap or a common gap. The breakaway gap will be confirmed if the GBP/USD fails to break and close above 1.2080 so any potential gap close will be delayed. If this is a common gap then we might see a gradual gap close. 1.2160-80 is the POC for new shorts on gap close. Notice that L5 has been over show and that pound is really under pressure so next target is 1.1940 followed by 1.1900. So traders pay attention to 1.2080 and POC zone.
Daily technical analysis is written by Nenad Kerkez, a senior analyst at Admiral Markets