GBPUSD Losses Momentum

Many investors could be rubbing their eyes after reading this but last week, the GBPUSD recorded over seven days of consecutive losses for the first time since May 2012. Following the tragedy in Eastern Europe the week prior, last week commenced with investors seeking safe-havens, such as the USD. A lack of hawkishness in last Wednesday’s BoE Minutes and Thursday’s UK Retail Sales falling slightly below expectations further enticed investors to take profit on the Cable.

The GBPUSD concluded the week below 1.70 for the first time in a month.

With the exception of various domestic housing releases on Tuesday, UK economic data is low in volume this week. Any fluctuation in the GBPUSD valuation will likely be controlled by what type of market reaction arises in anticipation of Wednesday’s US GDP/ FOMC decision and Friday’s Non-Farm Payroll report. If the GBPUSD continues to suffer losses on Monday and Tuesday, this will symbolize the first time the GBPUSD has recorded over ten days of consecutive losses since February 2010.

In regards to the technicals on the Daily timeframe, a bullish trend line which has been in play since October 2013 continues to control the overall GBPUSD direction. However, a tentative bearish channel has now emerged and the price appears to be slowly pulling back towards the trend line. Investors could be looking at this trend line as a possible entry area.

Before then, the RSI and Stochastic Oscillator is indicating that it can experience some more bearish movement before entering the oversold boundaries. Meaning, the 1.6950 or maybe even the 1.6923 support level might be visited over the next day or two.

Source: GBPUSD: A loss of momentum

About the Author
Jameel Ahmad is the Chief Market Analyst at Forex Time (FXTM). He holds a BA (Hons)degree in Business Studies with Accountancy & Finance from the University of the West of England, Bristol, UK. In his early career, Jameel worked on a variety of projects in the Middle East, Europe and United States, which allowed him to develop a detailed understanding of banking, international finance and asset management. Later on he worked as a strategic research analyst for an international brokerage firm, where he gained invaluable experience in writing FX commentaries and fundamental analysis on distinguished financial websites.

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