At FXStreet we’re always looking to offer the best objective information at one click for traders and professionals. For Brexit’s coverage, we provided breaking news, analysis, opinion pieces and more than 15 live coverages. And so we did anticipating Pound Sterling’s fall before the UK referendum was even announced.
Last Christmas, our contributor Omkar Godbole and, Gonçalo Moreira, Forex analyst and Content Advisor at FXStreet, warned us about it at GBP/USD Forecast 2016: BoE liftoff could be delayed, Bears could target 1.45-1.4280.
In words of Godbole, “the Brexit fears in H1, along with the delay in the BOE liftoff is likely to keep Sterling under pressure. We may be in for a serious fall if the markets focus on the worsening UK current account to GDP ratio. Sterling could target 1.3954 in this case”.
But it was Moreira‘s Point and Figure chart that had the best forecast: “The downside risk implied by two horizontal counts resulting from the consolidation formed since Spring 2015 is 1.3400 and well below the early 2009 low, 1.3000. No upside target is valid in this resolution, the reason being the bearish semi-catapult already breaking down on two occasions.”
Still curious about FXStreet analysts’ predictions? Check some quotes below:
‘GBPUSD a pair to monitor in 2016: it has not concluded its losses’ – Jameel Ahmad (January 4th)
Jameel Ahmad on his interview forecasting 2016 when asked to predict the worst-performing currency of 2016:
“If I was going to take a major currency pair to monitor, it would have to be the GBPUSD at this stage. Traders using the daily timeframe would have seen for months that gains have been strictly capped below its 50,100 and 200 Moving Averages for months and this has provided regular sell-on rally opportunities to traders. However, I don’t necessarily think this pair has concluded its losses yet and the possibility of a UK referendum on its EU membership in 2016 would be a potential event risk for investors to look out for even if it has not been confirmed yet.”
‘There’s potential for a British Pound collapse in 2016’ – Martin Armstrong (January 4th)
And here comes ‘The Forecaster’, living up to his legend of making bold predictions and getting them right. How about that:
“The final decline in commodities and wild ride in the currency markets that will swing in both directions as we approach 2017 which will be political chaos globally from election in USA, France, Germany, to the EU vote of exiting the Euro and a likely uprising in Greece.
We are likely to see the dollar still strengthen and the shocker could be the collapse of the British pound to eventually retest the par level of 1985.
The potential for the biggest move will be the British pound if it closes below the 14050 level at the close of 2015. However, a closing even below 14615 will be a warning that there may be a serious crack on the horizon.”
Position yourself ahead of the key event risk – Brexit – Haresh Menghani (Jun 22nd)
Haresh on the bearish scenario of a Brexit. Technical levels achieved and other targets still to watch now:
“If there is a vote to leave the EU, the GBP/USD pair could immediately slump below the 1.4000 important support and should continue weakening over the next few weeks and months. A confirmation of the break-down below 1.4000 handle, would accelerate the slide and immediately expose 2016 lows support near 1.3850-40 region. A follow through selling pressure has the potential to continue dragging the pair further towards 2009 swing lows support around 1.3500 region, with some intermediate support around 1.3680-75 region.
The pair could be expected to witness an unprecedented fall to 1.3300 (estimated decline post rectangular formation break-down) and possibly till 1.2300 level, expected price target of the bearish flag chart-pattern.”
‘Brexit not priced in the GBPUSD, Cable may drop below 1.38’ – Lukman Otunuga (June 16th)
Lukman about GBPUSD shorts prior to the referendum called them “frightening”:
“It is frightening how the speculative shorts on faint “Brexit” expectations have already dragged the GBPUSD to fresh two month lows with prices still vulnerable to further losses. This pair may be destined to decline to levels not seen since 2009 below 1.3800 in the events of a “Brexit” as fears heighten over the future of the UK economy. From a technical standpoint, the GBPUSD is bearish and fulfils the prerequisites of a downtrend as there have been consistently lower lows and lower highs. Prices are trading below the daily 20 SMA while the MACD trades to the downside. A decisive break down below 1.4100 should open a path towards 1.400 and potentially lower.”
He also called rightfully the volatility in GBPJPY but fell short in the levels (fell much lower, now at 135!):
“A pair such as the GBPJPY may unleash explosive levels of volatility after the referendum vote on the 23rd of June as the sharp movements from the Sterling and potentially strong Yen from risk aversion encourages sellers to pounce. The “Brexit” vote may weaken the Sterling while bolstering the Yen, thus providing an excellent foundation for bears to install a heavy round of selling. From a technical standpoint, this pair is already bearish as there have been consistently lower lows and lower highs. Prices are trading below the daily 20 SMA while the MACD trades deep into the downside. A breakdown and weekly close below 150.00 could open the floodgates towards the next relevant support based at 140.00.”
Brexit: should I stay or should I go? – Valeria Bednarik (June 21st)
Valeria also had the JPY surge predicted in her preview:
“The other currency that will benefit, and much, with a “leave” victory, will be the Japanese yen. The Asian currency is strongly bullish ever since the BOJ remain on-hold during the last two meetings, and the GBP/JPY may plummet 300/500 pips, whilst the USD/JPY will move one step closer to 100.00.”
Let’s see what happens next because after Brexit the show must go on.
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