It began with the greenback making some headway two weeks again, earlier than a drop beneath 1.2500 made issues actually powerful for GBP/USD. There was a short consolidation part beneath the determine stage however we’re seeing sellers choose up the momentum once more within the final two days. And now, the pair is down one other 0.4% to 1.2315.
From a technical perspective, there may be little or no help in stopping the drop right here. The following key help goal would be the October low itself at 1.2037. That is nonetheless almost 300 pips away from right here.
Until the temper music adjustments up for the greenback, it could be powerful to argue in any other case. And that’s regardless of the latest inflation knowledge from the UK, as argued final week here.
Whereas the BOE remains to be poised for a possible August charge minimize, the Fed’s timeline has readjusted fairly considerably. We’re taking a look at one doubtlessly in September however even that is not as a lot as a given as in comparison with the BOE for August. And that just about outlines the danger steadiness for each the greenback and pound at present.
I imply, if sterling cannot even compose itself even with a greater threat temper immediately, that is not an excellent signal within the short-term particularly with the chart wanting as it’s above.
This text was written by Justin Low at www.forexlive.com.
