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GBP/USD hits 7 week low amid Brexit uncertainty, USD strength

By Ritu,

Capital Sands

GBP/USD has resumed its falls and hit the lowest since mid-December after the EU and the UK laid out different views for post-Brexit relations, raising the odds of no deal. The US dollar is gaining amid upbeat data.

On its way down, pound/dollar fell below the 50, 100, and 200 Simple Moving Averages on the four-hour chart. Moreover, it dropped below the uptrend support line that had accompanied it since mid-January and momentum turned positive.

However, the Relative Strength Index is close to 30 – near oversold conditions. This development implies that an upside correction may be coming soon. A correction could be temporary.

GBP/USD continues battling 1.2955, the low point in January. Further down, 1.29 is a round level and also worked as support in mid-December. It is followed by 1.2875, 1.2820, and 1.2775.

Looking up, resistance awaits at 1.2975, which was a cushion in late January. Next, 1.3010 is a veteran resistance line, and it is followed by 1.3035, which held GBP/US down in late January. 1.3075, 1.3110, and 1.3175 are next.

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