Wednesday, August 8, 2018

GBP/USD - 09 August 2018


undamental Highlights

The Pound crashes below its previous 11-month low as Brexit fears continue. Investors are selling the British Pound based on last week's comments from two key British figures. During the BoE statement, Governor Carney warned that there is an “uncomfortable risk” with a no-deal Brexit then during the weekend, U.K's Trade Minister, Liam Fox reaffirmed that there is a chance the U.K will not reach a deal with the EU and will have to settle with a hard Brexit. As investors continue to worry about the outcome of Brexit, the sell-off looks likely to continue. Moreover, a positive release from the U.S PPI today might help the greenback put further pressure on the Pound.

Technical Analysis

The Pound continues to break below support levels. Most recently, the Pound broke below both the 1.29591 and 1.29176 support levels paving the way for a drop towards the next support at 1.28515. Given the negative sentiment surrounding the Pound, the currency is expected to continue its downtrend. A break below the 1.28386 mark may clear the path for a drop towards the next price action support level which coincides with the 1.414 Fibonacci extension.

Support: 1.28386 1.27891
Resistance: 1.29176 1.30033

Chart (H4)