GBPUSD Down and Out; Hits 7-year Low

GBPUSD Down and Out; Hits 7-year Low

Key Highlights            

  • British Pound continued to trade down, and created a new 7-year low against the US dollar.
  • GBPUSD broke the 1.40 level and it looks like set for more losses in the near term.
  • All the tension and drama in the UK and the Euro Zone regarding the Brexit ignited a solid downside reaction in the British Pound.
  • In the UK, the Gross Domestic Product report will be released by the National Statistics, which is forecasted to post an increase of 0.5% in Q4 2015.

GBPUSD Technical Analysis

The British Pound continued to suffer heavy losses against most major currencies, and it looks like it may continue its slide against the US Dollar. The GBPUSD pair is already down and out, plus trading below the 1.4000 levels.

GBPUSD

The GBPUSD created a new 7-year low and still it looks like the bears are not done yet. There is a lot of pressure on the British Pound bulls, and that is the reason why the GBPUSD might even break the 1.3900 level.

Any minor correction from the current levels may be considered as a sell opportunity in the near term.

UK GDP

Today in the UK, the Gross Domestic Product, which is a measure of the total value of all goods and services produced by the UK will be released by the National Statistics. The forecast is slated for a rise of 0.5% in the GDP in Q4 2015, compared with the preceding quarter. If there is a decline in the GDP or the result fails to match with the forecast, then it may further increase the bearish pressure on the British Pound.

Japanese Foreign investment in Japan stocks

Today, in Japan the Foreign investment in Japan stocks, which referrers to bonds issued in a domestic market by a foreign entity in the domestic market’s currency was released by Ministry of Finance. The report was not encouraging, as the Foreign investment in Japan stocks posted a reading of ¥-441.0B.

Overall, the market seems to be betting on safe havens and it may continue to take the pound down until there is a relief in the Euro Zone. We need to keep a close eye on the 1.3900 level for more losses in the GBPUSD pair.



Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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