The pound started the new week very badly and it continues to decline, with the GBPUSD pair briefly dropping below the psychological 1.20 threshold today, reaching fresh 3-year lows.
Traders continue to sell sterling after Prime Minister Boris Johnson said he would trigger a general election in October if lawmakers pass legislation later in the day to force a Brexit delay in the event of a no-deal.
MPs are planning to put forward legislation forcing a delay until the end of January if Johnson is unable to reach a deal with the EU by mid-October.
Thus, the pound could remain under selling pressure, due to elevated political uncertainty and the looming Brexit deadline. Some analysts are already predicting 1.10 or even parity over the next months, for the GBPUSD pair, that is.
From the technical analysis perspective, the pair seems heavily oversold, but this fact doesn't need to be enough to stop bears. If the daily candle closes below the 1.20 mark, further selling could occur.
The short-term support seems to be at today's lows at around 1.1960 and if it doesn't hold, the decline could continue, targeting October 16 lows at 1.19.
On the upside, rallies are expected to be sold, with the first stronger resistance located near 1.2080/1.21. Rising above would most likely hit weaker stop-losses, which could push the pound further higher to 1.2140.
Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.
Recommended Content
Editors’ Picks
EUR/USD falls back toward 1.1150 as US Dollar rebounds
EUR/USD is falling back toward 1.1150 in European trading on Friday, reversing early gains. Risk sentiment sours and lifts the haven demand for the US Dollar, fuelling a pullback in the pair. The focus now remains on the Fedspeak for fresh directives.
GBP/USD struggles near 1.3300 amid renewed US Dollar demand
GBP/USD is paring back gains to trade near 1.3300 in the European session. The data from the UK showed that Retail Sales rose at a stronger pace than expected in August, briefly supporting Pound Sterling but the US Dollar comeback checks the pair's upside. Fedspeak eyed.
Gold hits new highs on expectations of global cuts to interest rates
Gold (XAU/USD) breaks to a new record high near $2,610 on Friday on heightened expectations that global central banks will follow the Federal Reserve (Fed) in easing policy and slashing interest rates.
Pepe price forecast: Eyes for 30% rally
Pepe’s price broke and closed above the descending trendline on Thursday, eyeing for a rally. On-chain data hints at a bullish move as PEPE’s dormant wallets are active, and the long-to-short ratio is above one.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.