GBP/USD analysis: more Pound's weakness expected
|GBP/USD Current price: 1.2222
The GBP/USD pair closed the week marginally higher at 1.2222, trimming most of the gains achieved on Monday and Tuesday. The pair fell for six consecutive weeks before finally paring losses and correcting, meeting selling interest around 1.2330, the 23.6% retracement of the 1.3445/1.1964 decline, indicating that the dominant bearish trend remains firm in place. The absence of Brexit-related headlines, helped the Pound, although the related risk are still high and point for a continued decline for the UK currency. Data released on Friday showed that the UK government borrowing data for September was larger than expected, suggesting that the government’s borrowing objectives for the year are perhaps at serious risk, particularly considering that the UK also runs a large current account deficit that could be exacerbated it the UK has to leave the single market. From a technical point of view, the daily chart shows that the RSI indicator resumed its slide after failing to overcome its 30 level, while the Momentum also turned south within bearish territory and following an upward correction, all of which supports a downward extension. In the 4 hours chart, the pair presents a neutral-to-bearish stance, given that the price is below a directionless 20 SMA, while technical indicators hold flat, but well below their mid-lines.
Support levels: 1.2170 1.2130 1.2090
Resistance levels: 1.2245 1.2290 1.2330
View Live Chart for the GBP/USD
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