? GBP/USD Flies Up & Down During Chaotic Brexit Process ?

January 16, 2019

3 min read

Hi traders,

the GBP/USD fell impulsively before the vote in the UK parliament on the UK-EU proposal but quickly rebounded after hitting the 50% Fibonacci retracement level. The Brexit process is making the GBP a very volatile currency and there seems to be no end in sight as the British government struggles to find a path foward.

GBP/USD

4 hour

For the moment, the UK’s Prime Minister has seen her proposal heavily defeated in yesterday’s vote and she is now facing a vote of no confidence. The UK will probably seek to reopen the negotiations with the EU but some voices are also pushing for 2nd referendum whereas others cheers for a hard exit without any deal. The deadline is looming with only 2.5 months left.

The GBP/USD seems to be in a wave B (green) at the moment after making a bearish turn which completed wave A (green). Price could still expand the wave B with a new low unless price manages to clearly break above the resistance.

1 hour

The GBP/USD is probably still in a wave B (green) but a strong bullish break could indicate that price has already completed the wave B (green) and could now be moving higher as part of a wave C (green).