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Flash Note: British Pound / US Dollar – UnumCapital
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Flash Note: British Pound / US Dollar

Flash Note: British Pound / US Dollar

Long term, we have seen the pair develop a large multi-year head and shoulder technical formation, where a breakdown occurred during June 2016 and with the Fundamental trigger being the Brexit Vote. Since then, the price has re-tested the breakdown level, and has since consolidated in a sideways trading range with highs (resistance) of roughly 1.3400c and lows (support) of 1.2000-1.2120. So far this monthly the pair is lower by 3%, with a fresh attack near the aforementioned support zone where a break and monthly close below this level opens up further weakness for the pound. The monthly Relative Strength Index (RSI) trades with a weaker bias at a current print of 39. It should also be noted that the right shoulder and current consolidation lie with a 9-year downward channel. Summary: Longer term, the pair remains weak and is vulnerable to fresh multi-year lows.

Lester Davids

Trading Desk Analyst

Unum Capital (Pty) Ltd
An Authorised Financial Services Provider (FSP 564)


T: +27 (0)21 201 7270             W:  www.unum.co.za             E: lester@unum.co.za


Lester Davids

Lester joined Unum Capital in July 2016 and is a Trading Desk Analyst focusing on local (JSE) and global multi-asset class technical strategy and research which includes idea generation.

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