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Apr 13 - 06:55 AM

GBP/USD - COMMENT-Ominous Signs For Sterling And Big Levels Calling

By Peter Stoneham  —  Apr 13 - 05:25 AM

Sterling fell to a new trend low of 1.2973 early Wednesday and, despite drawing some support from a 30-year high for UK inflation, is still on track to re-visit major low points versus the dollar.

Rising inflation and a central bank already on a tightening cycle should slow further sterling depreciation but the U.S. Federal Reserve is adopting a stronger hawkish bias and a broadly stronger dollar is the result.
Note that USD/JPY has recorded a 20-year high at 126.32.

Technically, the longer-term charts are pointing to further GBP/USD losses and are suggesting that significant low points from October 2016 and March 2020, 1.1491 and 1.1413 respectively, are fair game for bears.

A key 50% Fibonacci retracement level taken off the March 2020 1.1413 low and June 2021 1.4250 high provides a nearby target at 1.2832.
Below here and the monthly Ichimoku cloud base at 1.2679 could provide a further jumping off point for those looking for a deeper sterling drop.
The cloud itself is falling and currently has a low point at 1.2455 out to December.

For more click on FXBUZ


GBP/USD monthly Ichimoku chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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