Monday, August 6, 2018

GBP/USD - 07 August 2018


Fundamental Highlights

The Pound breaks below the 1.3000 support level and drops towards the 11-month lows. Not only was the Pound's drop attributed to the strengthening U.S Dollar but it was also attributed to the pessimistic comments from U.K's Trade Minister, Liam Fox. During an interview, Fox pointed it out that there is a chance that the U.K will not reach a deal with the EU and will have to settle with a hard Brexit. For today, investors need to monitor U.K's Halifax House Price Index since a beat in this figure might cool down the bearish momentum.

Technical Analysis

The Pound continues to break below support levels indicating strong bearish momentum. Most recently, the Pound broke below the 1.30033 support level which paved the way for a drop towards 1.29591. Given the three day drop in the U.K currency and after reaching a key support level, expectations point towards a consolidation until a release of a major news event from either side of the currency pair.

Support: 1.29591 1.28515
Resistance: 1.30033 1.30502

Chart (H4)