The pound collapsed and sharply fell

October 10, 2016

The pound weakened against the dollar after François Hollande’s comments who said if the UK wants hard Brexit they will get it.

Current situation

The pound collapsed and sharply fell during the Asian session on Friday. The sterling crashed below 1.2600 and extended its losses towards 1.1900 at night. The GBP/USD lost about 6% overnight. After a sharp fall the price returned to the 1.2400 region where it remained during the day. The moving averages kept heading lower, following the price downwards. The current resistance is seen at 1.2500, the support lies at 1.2400. 

MACD remained in the negative area. The MACD histogram decreased which indicates the sellers’ strength. RSI is in the oversold area which confirms the current downward movement.

Trading recommendations

The pair is oversold. We expect sideways trades and a recovery towards 1.2600.

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