GBP/USD Technical Update

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The sterling is expected to continue its protracted downtrend, as the latest polls on the Scottish independence referendum indicated supporters surpassed people expected to vote against it for the first time.

In our GBP/USD technical analysis for this week we favored a correction for the pair, and our opinion was supported by a number of technical clues. Fundamentals seriously interfered in the equation, however, and the cable opened with a huge gap against its US counterpart, at 1.6177. The reason for that was the political uncertainty in the UK, stemming from the latest YouGov survey results released on Sunday. The latter showed supporters of Scottish independence took the lead from the “no” voters.

The current situation in the UK drastically changed the technical picture, and we no longer expect a correction to 1.6457, at least not in the very near term. With fundamentals turning sour, we anticipate the GBP/USD to continue its slide further south. Next target to the downside is the 1.60 psychological support.

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