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Mar 23 - 11:55 AM

GBP/USD - COMMENT-Sterling Outlook Worsens After 55-DMA Break; Fibo Support Eyed

By Paul Spirgel  —  Mar 23 - 10:18 AM

GBP/USD fell to six-week lows on Tuesday, relinquishing more of its early 2021 gains and damaging its technical outlook further by breaking below the 55-day moving average.

The pound was down 0.55%, at 1.3785, though off late-Europe's low of 1.3752.
Its fall below the 55-DMA by 1.3807 was ominous -- especially if it were to close below it -- since this moving average underpinned cable since November 2020.

With Brexit issues, lockdowns and COVID vaccine uncertainty obscuring the UK growth picture, sterling could slide further.

Congressional testimony by Fed Chair Jerome Powell nL1N2LK2PL and Treasury Secretary Janet Yellen nL1N2LL027 could keep the dollar bid remaining upbeat on the U.S. economy owing to support from vaccinations and stimulus nL1N2LL195.

The break below the 55-DMA opens the way for tests of daily cloud top support by 1.3746 and key 50% Fib support at 1.3688.
Below the 50% Fib of the November-February rise from 1.2854 to 1.4240 risks a run to GBP/USD's 200-DMA by 1.3243.
For more click on FXBUZ


GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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