The second trading day after historical Brexit decision brings fresh pressure on Sterling and Euro, which started week with gap-lower opening.
Shockwaves across global markets were sent after announcement of decision Britain’s electorate, who voted to leave the Union. Global currency, commodity, equity and bond markets were impacted, with further turmoil in the markets expected
The pound bounced of Friday’s 31-year low at 1.3225, on profit-taking action, after crashing over 10%, with upside action being capped under strong 1.4000 resistance. The pair looks for return to 1.3225, as deeply bearish mood persists after Britain opted to leave European Union. Sterling could fall more, as Bank of England is expected to cut interest rates to support the economy.
The Euro is also under strong pressure, being pulled by Sterling, on strong uncertainty on UK referendum’s decision which clouded the future of the European Union.
The single currency started week with gap-lower, after recovery attempts from 1.0909, post-referendum fresh low, stalled under strong 1.1200 barrier.
Near-term outlook for the Euro is also negative and further weakness could be expected, as European Union’s officials requested to start the process of negotiating term of divorce from the Great Britain.
Another factor that could additionally shake the Union is the domino-effect of Brexit that could spread on other states wanting to leave the Union.
On the other side, traditional safe-haven instruments, Japanese yen and Gold, remain near fresh highs, after rallying on Brexit decision. Markets now focus on possible action of Bank of Japan that may intervene to stop yen’s appreciation. Japanese authorities have already signaled such action, but stay so far on verbal warnings.
Crude oil prices show attempts of stabilization on Monday, US and Brent oil fell about 5% on Brexit decision on Friday. Investors assume that Britain’s decision to leave the Union could have little impact on global oil demand, keeping the price still above key supports. However, traders remain concerned about oil global oversupply that would build additional pressure on oil price which so far failed twice to sustain break above psychological $ 50 barrier.

Important levels

GBPUSD

The pound opened with gap-lower against the US dollar on Monday, showing persisting downside pressure. Corrective bounce off fresh low at 1.3225 was capped under strong 1.40 barrier, with subsequent weakness erasing the largest part of Friday’s recovery attempt and shifting near-term focus lower.
Session high, which lies just under former critical support at 1.3500, now marks initial resistance, followed by Friday’s pre-close lows at 1.3615 zone and intraday high at 1.3835. Key near-term barriers lay at 1.3977/40, Friday’s recovery top / psychological barrier.
On the downside, session low at 1.3352 marks immediate support, ahead of 31-year low at 1.3225, loss of which could trigger fresh bearish acceleration towards 1.3100 and psychological 1.3000 support.
EURUSD
The Euro hit session low at 1.0981, after recovery attempts off fresh 1.0909 low left a double-top on Friday and subsequent weakness was accelerated on week’s gap-lower opening. The pair may spend some time in consolidative action, however, overall structure remains negative. Session high at 1.1073 marks initial resistance, guarding recovery peaks at 1.1178/87, which are expected to limit fresh recovery attempts.
Initial support lies at 1.0981, ahead of 1.0909, loss of which could trigger fresh bearish acceleration and focus next key support at 1.0820.
USDJPY
The pair consolidates Friday’s sharp fall that spiked to fresh 29-month low at 98.98. Recovery action was so far capped at 103.23, near the mid-point of Friday’s fall, with firmly bearish technicals, maintaining the downside pressure.
Initial resistance lies at session high at 102.45, followed by 102.88 and key 103.23 barrier. Immediate support lies at 101.45, followed by psychological 100.00 support and key 98.98, last Friday’s low.

GOLD
Spot Gold maintains strong bullish tone and consolidates under Friday’s spike high at $1358, holding above pivotal supports at $1316 and $1300. Bullish technicals favor fresh upside action, with initial resistance at $1335/39, session high / Fibo 38.2%, followed by key $1358 peak, break of which would trigger fresh bullish acceleration towards $1400 resistance., Market Analysis