British Pound faced a lot of heat recently versus the US Dollar, and it looks like the GBP/USD pair may decline further moving ahead.
GBP/USD Weekly Analysis – British Pound Remains A Sell?
· British Pound after trading as high as 1.3444 against the US Dollar found sellers
· The GBP/USD declined heavily and broke a major support area during the downside.
· It looks like the 1.3150 area is now a major resistance zone for the GBP sellers.
GBP/USD Technical Analysis
The British Pound was in an uptrend against the US Dollar recently until it found sellers near 1.3450. There was a sharp reaction, and the GBP/USD pair started trading lower.
During the downside move, the pair broke a couple of important support levels. First, there was a close below the 100 simple moving average (H4 chart). Second, there was a break below a support trend line formed on the 4-hours chart of GBP/USD.
Third, the pair also closed below a crucial support of 1.3150. So, it looks like the recent move in GBP/USD was bearish and calling for more declines. If the pair corrects higher from the current levels, then it may face sellers. The 4-hours RSI is around the 35 level, and not showing any major sign of a recovery in GBP/USD.
Trade Idea – Selling rallies near the 1.3150 may be considered with a tight stop of 20-30 pips.
This week, there are no major economic releases in the UK. However, there are many in the US like the Fed interest rate decision, which may impact the market.
Today in the UK, the Rightmove House Price Index was released. The market was not expecting any major increase in the index in September from the last rise of 4.1%. The result was a bit better, as the index gained 4% in Sep 2016, compared with Sept 2015.
The report added that “Price of property coming to market rebounds by 0.7% (+£2,277) after falling 2.0% over previous two months”.
Overall, the British Pound may rise in the short term versus the US Dollar, but likely to remain under a bearish pressure as long as it is below 1.3150.