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Jul 02 - 07:55 AM

GBP/USD - COMMENT- How Low Could Sterling Go While Under The BoE Cloud

By Peter Stoneham  —  Jul 02 - 06:14 AM

Sterling's current bout of weakness versus the dollar begs the question: how low could it go? Technically, the answer is quite a bit lower but fundamentally a change of fortunes might not be far away.

A combination of broad-based dollar strength and a dovish steer from Bank of England governor Andrew Bailey has sent sterling sharply lower versus the dollar over a six-day period.

This drop has brought some key technical levels into view - a monthly Ichimoku cloud top at 1.3710 and double day lows from April 9-12 and March 24-25 at 1.3670.
Below these levels, the 200-day moving average comes in at 1.3645.

The big prize for bears is at 1.3580, a minimum correction off the significant 1.1413-to-1.4250 gain seen between March 2020 and June 2021.

Those looking for a lifeline might latch onto the planned July 19 easing of UK COVID-19 restrictions.
As the economy breaths easier the pound might come back on line, though fundamentally the dollar might have a bigger say in sterling's fortunes.

For more click on FXBUZ






GBP/USD daily candle chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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