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Daily Technical Round-up: Brexit stalemate impacting the pound

Michael Baker, Tuesday, 21 May 2019

Technical Analysis

GBP/USD

Pivot: 1.2731

Scenario 1: No evidence from yesterday that we are turning around. Levels to the downside coming into focus. 1.2720/2657 currently trading and if we head any lower then it’s the 2018 yearly lows at 1.2475/1.2430.

Scenario 2: We did get above the daily pivot yesterday but couldn't hold on, bulls will want to do better. 1.2760/1.2750 holding short-term moves higher since Friday. Weekly pivot at 1.2823, with the 25 April low and breakdown between 1.2852/.2865. 1.2960/.3008 now seem very far away.

Chart: Four-hour chart showing the continuous drop in price. Moves driven by fundamental data. Looking for a turnaround in Brexit talks as sentiment pointing towards instability.

21 GBP

EUR/USD

Pivot: 1.1163

Scenario 1: Dollar driving the basket down, instability in the pound not helping. Yearly lows at 1.1133/.1110, seems like this area is due for an assault. Trend support at 1.1046.

Scenario 2: 1.1177/.1184 seeing areas of support and resistance, overcoming here then it’s the weekly pivot at 1.1192. Last week’s pivot split the action in half, this comes in at 1.2118 which held the highs on 15/16 May. Highs held since 22 April at 1.1264.

Chart: Four-hour chart showing the breakout from the triangle and potential resistance levels. Yearly lows not far off.

21 EUR

Germany 30

Pivot: 12,106

Scenario 1: Fell below weekly pivot yesterday and today's cash session has seen prices test 12,111. If the short-term weakness persists then we could head towards the recent daily lows at 11,991. Trend channel low is at 11,933 with support at 11,876/688 holding since start of April.

Scenario 2: Looking to recoup yesterday’s small blip. Pushing back above 12,111/184 then we can target a trend resistance on the four-hour candle highs at 12,230. 12,324 has held on a few occasions since 7 May. 12,445 is the yearly high which coincided with Sep 18 high.

Chart: Daily trend channel showing with no clear attack on either band yet. Strong support and resistance not too far away.

21 DAX

Wall Street

Pivot: 25,727

Scenario 1: Market dropped to the 16 May low at 25,552 before recovering. Trend resistance from the 1 May high. Push above then we look to target the 50% which held the market last week at 25,971. 25,970/26,000 looks like the level to beat, there are previous daily highs above followed by a breakdown area at 26,100.

Scenario 2: Break below 25,552 then we look for the trend support zone. This area coincides with the 8/25 March and 13 May lows at 25,345/25,215.

Chart: Four-hour chart showing trend support and daily lows which may come under attack if we start to fall lower. Trend resistance needs to break before we push on and test last week’s high and 50% fib.

21 Dow

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