2017 Q2 Summary
The forecast for the second quarter was wrong. However, the strength of the drawn down-trend line was not understated. When the currency exchange rate finally managed to pass the resistance of the down-trend and the 200-day simple moving average at exactly 1.2600, there was a jump. It could not even be called a jump. The move better can be described as skyrocketing. The move was caused by the changes in the fundamental outlook on the UK economy. To be precise, it was the announcement of the UK general election by Theresa May, which caused the jump in the currency pair. The Pound continued to gain ground against the Greenback afterwards, until the election came and Theresa May suffered a defeat. As a result the markets experienced another decline of the pair. Due to these reasons the GBP/USD pair is not simply hard to be analysed purely technically, it is actually useless, as Brexit talks and inner politics shape the future of the country.
2017 Q3 Outlook
There are two ways how to look at the future outlook of the Pound against the US Dollar. The first option is to look at it from a fundamental perspective, which means that the technical analysis of the chart is useless. Second is the option of technical analysis in the expectation that fundamental changes in the markets can be foreseen. Dukascopy analysts decide to combine the two options and develop two “if then” scenarios. The basis of the choice of the scenario is the outcome of the political situation in the UK. If Theresa May manages to gain control of legislation in the UK and thus control in the Brexit talks, the Sterling will surge. In this scenario the pair would attempt to surge up to the trend line of the long term large scale downwards aimed trend line. On the other hand, there might be chaos in UK politics and the country loses in the EU talks economically. In that case the range downwards has only the support of the 100 and 200-period SMAs above the 1.25 mark to be taken into account.
The forecast for the second quarter was wrong. However, the strength of the drawn down-trend line was not understated. When the currency exchange rate finally managed to pass the resistance of the down-trend and the 200-day simple moving average at exactly 1.2600, there was a jump. It could not even be called a jump. The move better can be described as skyrocketing. The move was caused by the changes in the fundamental outlook on the UK economy. To be precise, it was the announcement of the UK general election by Theresa May, which caused the jump in the currency pair. The Pound continued to gain ground against the Greenback afterwards, until the election came and Theresa May suffered a defeat. As a result the markets experienced another decline of the pair. Due to these reasons the GBP/USD pair is not simply hard to be analysed purely technically, it is actually useless, as Brexit talks and inner politics shape the future of the country.
2017 Q3 Outlook
There are two ways how to look at the future outlook of the Pound against the US Dollar. The first option is to look at it from a fundamental perspective, which means that the technical analysis of the chart is useless. Second is the option of technical analysis in the expectation that fundamental changes in the markets can be foreseen. Dukascopy analysts decide to combine the two options and develop two “if then” scenarios. The basis of the choice of the scenario is the outcome of the political situation in the UK. If Theresa May manages to gain control of legislation in the UK and thus control in the Brexit talks, the Sterling will surge. In this scenario the pair would attempt to surge up to the trend line of the long term large scale downwards aimed trend line. On the other hand, there might be chaos in UK politics and the country loses in the EU talks economically. In that case the range downwards has only the support of the 100 and 200-period SMAs above the 1.25 mark to be taken into account.
