GBP/USD: Buyers failing to build value above 1.30

Cycles & Levels: In the weekly, we’ve confirmed the establishment of a range by recovering above the midpoint of the 1.3290-1.2675 extremes. On the daily, the down-cycle is still very much valid, with the next key areas of focus coming at 1.30 round number, 1.3080 (midpoint last swing low) ahead of a descending trendline circa 1.32. From an hourly view, barring any Brexit breakthrough, I am expecting 1.30 (100% fib projection) to cap further gains near-term. The market is structurally very bullish of the hourly but faces the risk of trading much more choppy short-term. The pair is a ticking bomb of volatility set to explode on a Brexit deal speculation and US midterm election, hence trading it near term hinges on the current uncertainty of unknown high-risk event outcomes.

Correlations & Volumes: Based on the UK vs US 5-year yield spread, it justifies a lower valuation, but with so much uncertainty, one must account for any Brexit-induced sentiment play to overrule any yield advantage short-term. Based on volumes, last Friday’s bearish candle is far from screaming danger ahead. Control over the 1.30 round number (Friday’s POC), will provide hints over the side most likely to control price action in the very short-term.