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The FxPro Analyst Team

Forex: GBP/USD Holds Above Significant Support Post Scottish Referendum Shock

Tuesday evening, March 28, the Scottish parliament has voted by 69 to 59, in favour of holding a second independence referendum. GBP/USD has slumped more than 220 points since Tuesday, from a psychological level at 1.2600, to a 1-week low of 1.2376, breaking the support level at 1.2500.

This morning, the bulls have recovered the significant support level at 1.2400, as a correction after a slump, also because the level provides a stronger support. The bearish momentum has been waning; we will likely see a rebound here.

The 4-hourly Stochastic Oscillator reading is below 30, suggesting a rebound.

However, Theresa May, will trigger Article 50 of the Lisbon treaty today, March 29, starting the 2-year Brexit negotiation process with the EU.

It is still uncertain whether Brexit would be hard or soft, and what kind of final deal would be made. Be aware that downward pressure is still on GBP and GBP crosses with any negative news over Brexit process.

The resistance level is at 1.2460, followed by 1.2475 and 1.2500.
The support line is at 1.2420, followed by 1.2400 and 1.2380.

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5/5(2)