GBP/USD Forecast: Downward Risk Increase as the Referendum Looms
The GBP/USD pair started the week gapping lower, erasing all of its Friday's gains and reaching a fresh three-week low of 1.4315, on mounting Brexit fears, after a new poll released over the weekend showed that the "leave" vote is ahead of the "remain."
The GBP/USD pair pared losses with London opening, as market resumed dollar selling, but the bounce has not been enough to fill the weekly opening gap, and the pair consolidates around 1.4436.
The calendar will remain light in the UK this week, but the pair will continue trading on Brexit headlines, with the downward risk increasing as the referendum date looms.
The 4 hours chart shows that the technical indicators have turned higher within bearish territory, with the RSI bouncing from oversold readings and the Momentum indicator about to cross its 100 level towards the upside, but also that the price is struggling around a bearish 20 SMA, and below the 200 EMA, this last capping the upside around 1.4480. An advance above this last should see the price recovering up to 1.4520/30, whilst beyond this last the pair can advance up to 1.4570, particularly if the dollar comes under strong selling pressure later on the day.
The immediate support is now at 1.4395 with a break below it pointing for a quick test of the mentioned daily low around 1.4350, whilst below this last the next bearish target comes at 1.4310.