Freefall of GBPUSD

Today we will have a review for GBPUSD without further ado, just facts. Less talking and more doing.

Basic arguments:

The USD index continues its upward movement, and the GBP situation remains difficult due to the uncertainty with Brexit. Despite the equilibrium of the forward rate, the current price remains much lower than the equilibrium rate: 1,266 GBPUSD.

Thus, according to the basic arguments, we can expect the continuation of a downward trend.

Picture 1. The price chart of GBPUSD and the index of big traders for 11.05.2019 - 11.06.2019.

Technical arguments:

According to the technical analysis, we can clearly see a downward trend (as can be seen in picture 1). The price was exposed to a small correction that established a continuation of a "down" movement.

Analysis of big traders positions:

The chart of big traders positions in picture 1 indicates that the weakness of GBP primarily relates to the lack of patience from investors and closing GBP positions.

Forecast:

According to all arguments mentioned above, we can conclude that in the near future will remain a "downward" trend, so we forecast that the price will go DOWN.

We recommend to use the following indicators for comfortable work:

• RSI
• ROC (Rate of Change)

The ratio of positions: to keep the level of risk moderate the optimal position will be keeping 2 trades "down" and 1 "up".