The recent down move in GBP-USD has confirmed the triangle breakout which was in the making since early 2009! In fact, on the weekly charts it is below its 21/55/200 moving average. Also, it is in the 5th wave of decline (Elliot Wave Theory). So, all the rallies are to be sold in this market. SCARY? I believe its really very scary! Because the downside target is at least 1.35!! This could happen in next 6-12 months.
In fact the scarier part is the reason behind such a huge decline. It has to be serious fundamental thing which is going on. In the UK, the situation is perhaps not so positive on the policy front too. There is a lack of clarity around core policies and UK’s position with respect to EU in the future. There are concerns that the United Kingdom is going into a triple dip recession. Also, the new Bank of England Chairman Mark Carney is ultra-easing!
Surely, this move is negative as far as the precious metals and equity markets are concerned in the future.
Now it’s your turn…..
Feel free to share your experience and thoughts in the comments area.
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