GBP/USD Near Year-To-Date Lows After Worst Week Since August
Matthew Weller | Nov 07, 2021 12:15AM ET
Following the surprisingly cautious Bank of England (BOE) meeting this past week, the pound sterling is in freefall.
Looking at GBP/USD in particular, the pair is falling nearly 200 pips from Monday’s open, which would mark its worst week since August. More importantly, cable is approaching its year-to-date low at 1.3412; the last time the pair traded below that level was two days before last Christmas.
As the chart below shows, the pair is not yet oversold on its 14-day RSI indicator, despite the sharp drop so far this week. This suggests that rates could still fall further in the coming days, though after such a dramatic move, it wouldn’t be surprising to see a quick bounce of profit-taking ahead of the weekend:
Source: TradingView, StoneX
Regardless, it’s clear that GBP/USD bears have the upper hand in the short term. A confirmed break below 1.3412 in the coming days could open the door for a continuation lower, with little in the way of previous support until the 38.2% Fibonacci retracement of the entire 2020-2021 rally down below 1.3200. At this point, only a sharp reversal above the October highs in the 1.3800 area would erase the near-term bearish bias.
Original Post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.