Despite the US Dollar suffering significant corrective losses across most of the Majors (G8/ G10 currencies) in the first half of January (and particularly in the second week), the GB Pound continues to remain vulnerable.
Ongoing fears over a “Hard Brexit” have push GBPUSD below a key 1.2083 level, with risks of still further losses on an intermediate-term basis into January and Q1.
This GBP weakness, is continuing to encourage a push high in the FTSE 100 (the UK benchmark equity index), moving to yet another record high last week.
A prod at support at 1.2138 on Friday, after resistance at 1.2346 held Thursday, leaving risk to the downside into Monday.
Furthermore, the break last Wednesday below the 1.2083 level, shifted the intermediate term outlook from neutral to bearish.
- We see a downside bias for 1.2120; break here aims for 1.2037.
- But above 1.2250 opens risk up to 1.2317.
Short/ Intermediate-term Outlook – Downside Risks:
- We see a negative tone with the bearish threat to 1.1943 and 1.1880.
- Below here targets 1.1500 and 1.1000.
What Changes This? Above 1.2432 signals a neutral tone, only shifting positive above 1.2775.
Daily GBPUSD Chart
FTSE 100 Future
Another new all-time high on Friday, reinforcing the dip and a rebound on Thursday from above minor support at 7191.5, keeping risk still higher within the strong bull trend into Monday.
- We see an upside bias to aim for 7275.0; above targets 7288 and 7300.
- But below 7191.5 opens risk down to 7159.5, maybe 7141.5.
Short/ Intermediate-term Outlook – Upside Risks:
- We see a positive tone with the bullish threat to targets 7355, 7500 and 7607.
What Changes This? Below 6613.5 signals a neutral tone, only shifting negative below 6429.
Daily FTSE 100 Future Chart