GBP/USD Capped at Key Resistance Before 1.4346 Trend Line

GBP/USD Capped at Key Resistance Before 1.4346 Trend Line

GBP/USD was initially dragged up on the crosses with GBP/JPY making a huge rally as Yen got sold-off. GBP/USD has staged a continued upside effort and headed for a break of key resistance.

It is Brexit week this week and fifty-four percent of Britons would vote to remain in the European Union while 46 percent would opt to leave. This is according to an ICM telephone poll for the Guardian newspaper published on Monday in the U.K.

The Guardian's website offers a poll but excluded those who do not know how they will vote in the June 23 referendum.

Imaginary/ (forecast) figures sent out by the Treasury

Meanwhile, Chancellor Osborne analysis issued warning in a Times article as the Treasury claims Britain's economy would shrink 6% by 2030 and would leave UK ‘permanently poorer', costing every household the equivalent of £4,300 a year.

Chancellor Osborne : Britain better off in the EUR

His analysis, whether it be accurate from a man who continuously misses his own targets, also states that the negative impact GDP would result in a total reduction in tax receipts of £36 billion, equivalent to around an 8p increase in the basic rate of income tax while the UK is estimated to be between 3.4% and 4.3% of GDP better-off within the EU rather than with membership of the European Economic Area. The UK is estimated to be between 4.6% and 7.8% of GDP better off inside the EU rather than with a negotiated bilateral agreement like Canada, Turkey or Switzerland have. Finally, the UK is estimated to be between 5.4% and 9.5% of GDP better off inside the EU rather than adopting the rules of the World Trade Organisation like Russia or Brazil.

GBP/USD levels

In the broader picture in the charts, GBP/USD remains capped by the 2016 downtrend at 1.4280 / 1.4346. Recent highs above there come as 1.4457, then the 1.4568 April 2015 low and the 1.4665 February 2016 high. While below these levels, the price remains in a bearish trend, as suggested by Karen Jones, chief analyst at Commerzbank.

"Support lies at 1.4085/05, a close below here should trigger losses to the 1.3837 29th Feb low. Our negative bias and downside target remains the 1.3502 2009 low. Below 1.3500 our primary target will be 1.2750, the 78.6% retracement," Jones added in respect to the downside.