Disclaimer: The opinions expressed in this article are the personal views of the author and do not constitute investment advice.
I’ve spotted what appears to be a forming bearish flag on the GBP/USD daily chart. The range support at 1.5300 managed to hold throughout the holiday period although despite a nasty selloff on 29 December. We are in the process of yet another bounce from those lows and we might see 1.5700 challenged once again. But as the weekly chart shows a triangle I expect the first break of that to the downside with the 1.5000 level coming into view and a possible drop to all the way to 1.4300 – the 2010 low. As for the long term, fundamentally the UK still appears to be ahead of the curve compared to the stricken Eurozone and the pound could benefit, even becoming a future safe haven currency – but for now it might just have to suffer along with the other major currencies on flows to USD and US treasuries. Keeping an eye on oversold bounces though, especially for the EUR that is still looking frail but could catch up a bit in the next days or weeks.
