GBP/USD: a time to reflect on pounds weakness - FXStreet

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 25, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    Ani Salama, economist at FXStreet explained that the pound took a breather on Thursday following three days of sharp losses after UK scheduled an EU membership referendum for June 23rd.

    Key Quotes:

    "GBP/USD managed to move away a 7-year low of 1.3877 scored the previous day, as fears of a downward revision in the initial estimate of UK Q4 GDP did not materialize and stood at 0.5%.

    However, GBP/USD recovery lacked momentum and remained capped by the 1.4000 level. In the 1 hour chart, indicators head higher above their mid-lines reflecting today’s bounce while the pair trades slightly above the 20-SMA, suggesting room for further recovery. However, in the 4 hours charts indicators remain in negative territory and with the RSI having already corrected oversold conditions, limiting the upside potential.

    If GBP/USD breaks above 1.4000 it could extend the recovery to the 1.4080 zone, but the move will remain merely corrective as both technical and fundamental factors continue to favor the downside."
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