GBP/USD fails to consolidate and drops to fresh 8-month lows

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 5, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Córdoba) - A stronger US dollar across the board pushed GBP/USD to break previous lows and dropped further as it continues to decline. Cable is falling for the sixth trading day in a row. Greenback is rising in the market, but the best performer, for the second day in a row, is the Japanese yen.

    GBP/USD unable to recover

    The pair fell during the European session despite economic data from the United Kingdom showed an improvement in the construction sector. It dropped to 1.4655 and then stabilized. The recovery from the lows was capped by 1.4695 (and the 20-hour MA) and it turned again to the downside following Wall Street opening bell.

    After breaking 1.4655, it slid to 1.4639, hitting a new 8-month low. It was trading slightly above the lows, still under pressure. From the level it had a week ago, GBP/USD has lost almost 300 pips. It continues to approach 2015 lows that lie at 1.4565 (April 13); if it drops below it would be trading at the weakest level since 2010.

    GBP/USD technical levels

    Immediate support might be seen at 1.4635/40 (daily low / March 2015 low), 1.4600 (psychological level) and 1.4565 (2015 low). On the opposite direction, resistance now might lie at 1.4660 (Jan 4 low), 1.4695 (American session high, 20-hour MA) and 1.4725 (daily high).
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