BRITISH POUND TALKING POINTS
The British Pound extends the decline following the Bank of England (BoE) meeting, with GBP/USD at risk of exhibiting a more bearish behavior over the days ahead as it carves a series of lower highs & lows.
GBP/USD RATE EYES FRESH 2018-LOWS AS BEARISH SERIES TAKES SHAPE
Renewed fears surrounding Brexit appears to be weighing on the British Pound as Bank of England (BoE) Governor Mark Carney warns an undesired scenario may ultimately require a rate-cut in the U.K., and the central bank may move to the sidelines after delivering a 25bp hike earlier this month as ‘the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal.’
GBP/USD DAILY CHART
- The break of the July-low (1.2956) paired with the closing price below the 1.2950 (23.6% expansion) hurdle brings the downside targets on the radar, with the next region of interest coming in around the 1.2800 (50% expansion) handle followed by the Fibonacci overlap around 1.2630 (38.2% expansion) to 1.2640 (23.6% retracement).
- Keeping a close eye on the Relative Strength Index (RSI) as the oscillator appears to be snapping the uptrend trend from June, with a break of trendline support raising the risk for a further decline in the exchange rate as the momentum indicator comes up against oversold territory.