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Currencies: Technical Strategies
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How Much Further Can the Pound Fall?
Tue, Jan 13 2009, 13:33 GMT
by Andrei Pehar
The British Pound has been steadily declining against the US Dollar since reaching its high of 2.1160 in November of 2007. Have we finally reached bottom, or are there further lows in store?
To answer that question, we would first need to see price break out of its current range between 1.4481 and 1.5564, a range which has effectively been in place since early November of 2008.
We currently find ourselves beneath a key Fibonacci level at 1.4738, and moving down quickly towards the weekly S1 pivot at 1.4547 - if this level holds as support, then we will likely see price move back to re-test 1.5136 as resistance. If 1.4547 fails to stop the decline, then the next likely support is the weekly S2 pivot at 1.4016
Longer-term, if we continue to trade below the Fib at 1.5136 (and especially if we break the bottom end of the range at 1.4481), we could potentially see price drop as low as 1.3064
If there are signs of recovery (either due to a turn-around in the UK real estate market, a halt to the series of interest rate cuts by the Bank of England, or a sudden drop in the demand for the US Dollar), we would need to see this pair first get back above 1.4738 (and hold that level as support), in order to once again target the top side of the range at 1.5564, and if that breaks the next Fib level above at 1.5772.
Published on Tue, Jan 13 2009, 13:54 GMT
Archive
- An Interesting Chart- The USD/CAD Weekly
Published On Fri, Oct 30 2009, 22:25 GMT - Next Levels to Watch on the EUR/USD
Published On Thu, Sep 24 2009, 01:22 GMT - Key Level to Watch for the Yen
Published On Mon, Mar 16 2009, 20:04 GMT - How Much Further Can the Pound Fall?
Published On Tue, Jan 13 2009, 13:33 GMT - Has the Aussie Found Bottom?
Published On Wed, Oct 22 2008, 20:29 GMT
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