The Great Britain Pound (GBP) extended downside movement against the US Dollar (USD) on Monday after opening with a large gap and dragging the price of GBPUSD to less than 1.3450, following the landmark Brexit event. The price of the pound is currently being traded at the lowest level in nearly three decades. The technical bias remains extremely bearish because of a Lower Low in the recent downside move.
As of this writing, the pair is being traded near 1.3427. A support may be seen around 1.3227, the swing low of the recent downside wave ahead of 1.3200, the psychological number and then 1.3000, another major support.
On the upside, the pair is likely to face a hurdle near 1.3844, the major horizontal resistance area ahead of 1.4000, the psychological number and then 1.4500, another major horizontal hurdle as demonstrated in the above four-hour chart. The technical bias will remain bearish as long as the 1.5017 resistance area is intact.
The referendum – the vote in which everyone (or nearly everyone) of a voting age can take part – was held on Thursday, June 23 , to decide whether the UK should leave or remain in the European Union. “Leave” won by 52% to 48%. The referendum turnout was 71.8%, with more than 30 million people voting. It was the highest turnout in the UK-wide vote since the 1992 general election. England voted strongly for Brexit, by 53.4% to 46.6%, as did Wales, with “Leave” getting 52.5% of the vote and “Remain” – 47.5%. Both Scotland and Northern Ireland backed staying in the EU. Scotland backed “Remain” by 62% to 38%, while 55.8% in Northern Ireland voted for “Remain” and 44.2% for “Leave”.
Considering the overall technical and fundamental outlook, selling the pair on rallies appears to be a good strategy in short to medium term.