Up and down year as Brexit dominates.
The GBPUSD had a down and up year as Brexit news dominated. Over the course of the year, the UK changed PMs after attempts by PM May to pass her Brexit deal in Parliament failed and failed again.
PM Johnson after some shaky moments, called an election and won handily which led to passing his Brexit deal.
The news sent the GBPUSD to new year highs at 1.35139. However, over the last few weeks in the year, the price corrected lower - testing a lower trend line on the weekly chart above - before rebounded in trading yesterday and today.
With the move up this week, the price of the GBPUSD is ending the year closer to the highs. It has also shifted the bias more to the bullish side from a technical perspective.
What is making the technical picture more positive?
As already mentioned, the price correction over the last few weeks did stall at a lower trend line (see chart above). That hold was good news for the bulls.
Also helping is that the price has been able to climb above (and stay above) the 100 and 200 week MAs at 1.30146 and 1.30759 respectively (blue and green lines in the chart above) for the 2nd time this year/month.
Earlier this month in the run up to the election, the market took the price above the 200 week MA for the first time since April 2018. However, "a buy the rumour, sell the fact" move, limited the upside. Later, when PM Johnson started to speak about setting another hard Brexit date at the end of 2020 (for an agreement on trade details with the EU), the price of the GBPUSD moved back below that key 200 week MA (and 100 week MA as well).
The rally over that last two weeks, has the pair back above each of those moving averages - and moving away from them today. That is a bullish confirmation for the buyers. Stay above in 2020 would keep those buyers happy, and give sellers some cause for pause (and increase their pain too).
What would increase the bullishness now?
Off the weekly chart, getting back above the earlier year highs at 1.33496 at 1.33795 followed by a run toward the high for the year at 1.35139 would be the obvious targets.
What spoils the bullish party as we head into the new year?
A move back below the weekly moving averages would certainly be something that buyers would not appreciate. It would shift the bias back to the downside. A move back below the lower trend line would be a final hurdle that would give the sellers more control and make the buyers squirm again.
