Weekly Forex Forecast: 07-11 October 2019

Weekly Forex Forecast: 07-11 October 2019

How to use the basic technical analysis concepts we have shared with you to predict the next week’s currency pair price movement

GBP Rates Week in Review
Last week, our technical analysis indicated a bearish trend on the GBPUSD for a short sell at or above 1.23 and a buy back above 1.2071. This Monday, GBPUSD opened at 1.22898, reaching the high of 1.23396, setting the intraday low at 1.22046, and closing at 1.23036. Monday, the opportunity gain on the short sell was 0.78%. Tuesday, it traded between 1.23244 and 1.22268 and closed at 1.22983, adding an additional 0.6% short trade profit. Wednesday GBP was trading between 1.22651 and 1.23226 as of 12h44m GMT, adding extra 0.28% short trade gain.

This week the main news affecting GBPUSD was the UK Prime Minister Boris Johnson, who has submitted his “final offer” to the EU in an attempt to secure a last-ditch Brexit deal. Under the plan, the controversial Northern Ireland backstop would be replaced by an all-island regulatory zone. Northern Ireland would stay in the European single market for goods, but leave the customs union, a move that requires new checkpoints. The UK is currently due to exit the EU on October 31, with Johnson previously stating he is not prepared to delay it further.

Momentum daily indicators remain tilted to the downside, however, beware of Brexit induced volatility, which will leave the pair vulnerable to sudden spikes. The pair has found support Wednesday morning from the 50DMA situated at 1.2253, however, skepticism over Boris Johnson’s Brexit plan could see this level tested once more and opening the door for a move towards the 1.22 handle. That said, on topside the weekly high (1.2346) has so far capped upside in the pair this week.

Even though present investor sentiment is71% bullish on GBPUSD, believing it is testing the bottom of the ascending channel, where price may bounce from here. We see the investor sentiment as a contrary indicator.

Weekly Forex Forecast: 07-11 October 2019

Last week we alerted for the Pound-Dollar chart Head and Shoulders potential formation, while suggesting for the confirmation of the right shoulder. In the intraday GBPUSD illustrated above, the right shoulder is about to be completed and tested, which confirms our short position trading idea on GBPUSD.

Weekly Forex Forecast: 07-11 October 2019

As stated in the previous article, we will get a strong sell signal when the Neckline is broken. When such event happens, GBPUSD is expected to decline by the same amount as the change in price from the Neck line to the top of the head. So, we would set the sell position as follows:

For the week from October 7 to October 11, we will be waiting for the neck line of the head and shoulders to be broken at 1.2310, now trading at 1.23478, which will trigger a sell position on GBPUSD, and close the short position at or above 1.2088.

Price Target = Neck line – (Head – Neckline)
Price Target = 1.2310 – (1.2530-1.2310) =1.2090 GBPUSD

Weekly Forex Forecast: 07-11 October 2019

GBP to USD forecast for tomorrow, this week and month.
Pound to Dollar forecast on Friday, October, 4: exchange rate 1.2312 Dollars, maximum 1.2497, minimum 1.2127. GBP to USD forecast on Monday, October, 7: exchange rate 1.2307 Dollars, maximum 1.2492, minimum 1.2122. Pound to Dollar forecast on Tuesday, October, 8: exchange rate 1.2307 Dollars, maximum 1.2492, minimum 1.2122. GBP to USD forecast on Wednesday, October, 9: exchange rate 1.2274 Dollars, maximum 1.2458, minimum 1.2090.

In 1 week Pound to Dollar forecast on Thursday, October, 10: exchange rate 1.2242 Dollars, maximum 1.2426, minimum 1.2058. GBP to USD forecast on Friday, October, 11: exchange rate 1.2109 Dollars, maximum 1.2291, minimum 1.1927. Pound to Dollar forecast on Monday, October, 14: exchange rate 1.2165 Dollars, maximum 1.2347, minimum 1.1983. GBP to USD forecast on Tuesday, October, 15: exchange rate 1.2133 Dollars, maximum 1.2315, minimum 1.1951. Pound to Dollar forecast on Wednesday, October, 16: exchange rate 1.2076 Dollars, maximum 1.2257, minimum 1.1895.

Again, Remember to place stop losses, according to your risk tolerance as unexpected news coming to the market, may significant affect trends and prices. Until next article, wealthy trading.

Disclosures: The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any interests in the GBP/USD or any other securities. Further, This overview may include or be based in part on projections, valuations, estimates and other financial data supplied by third parties, which has not been verified by Tony Ferreira, nor KeySoft. Any information regarding projected or estimated investment returns are estimates only and should not be considered indicative of the actual results that may be realized or predictive of the performance of the GBP/USD or any underlying security. Past investment results of any underlying managers should not be viewed as indicative of future performance of the GBP/USD.