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GBP/USD drops further… 1.42 on sight?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The increasing buying interest around the greenback is now pushing GBP/USD to test the proximity of the 1.4200 key support.

    GBP/USD unable to gather traction

    Poor results from the Chinese external sector plus deflating momentum in crude oil prices have removed an important tailwind for the risk-associated space today, pushing the pair to test the 1.4200 handle after failing around the 1.4270 region.

    Nothing scheduled in the UK docket today, while Industrial/Manufacturing Production figures are due tomorrow. Previously, Governor M.Carney has argued that a ‘Brexit’ event could weaken GBP further and lift inflation, while MPC member J.Cunliffe said the UK could enter ‘uncharted territory’ if the country leaves the EU.

    GBP/USD levels to consider

    As of writing the pair is retreating 0.40% at 1.4209 and a breach of 1.4188 (20-day sma) would open the door to 1.4079 (low Jan.21) and then 1.3836 (multi-year low Feb.29). On the other hand, the next hurdle lines up at 1.4348 (61.8% Fibo of 1.4670-1.3833) followed by 1.4387 (55-day sma) and finally 1.4410 (high Feb.19).
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