The GBP/USD price has pushed through the support of 1.3400, will this see prices fall further?
The pound's been on a steady downward slide, and it's only getting worse. Why? It’s all down to a messy combination of the Bank of England’s (BoE) likely rate cuts and an economy that can’t seem to get its act together.
Let’s break it down:
Why the Pound’s in Trouble
BoE Rate Cuts: The market’s pretty much convinced the BoE is going to slash rates. Economic data isn’t helping, and inflation’s still a pain. This is just what the pound doesn’t need, and it’s been dragging it lower for weeks.
Weak Economic Data: Let’s be honest, the UK economy isn’t looking great. Retail sales? Sluggish. Industrial output? Meh. And don’t even get me started on growth. It’s like watching a slow-motion train wreck – you know it’s coming, but you can’t look away.
Technical Levels: I’m looking at 1.3000 as the key support. This could be a target for sellers. The head and shoulders pattern can be easily spotted with a neckline around the 1.3400 resistance. This could be the level that sellers re-enter the market.
What Does This Mean for Traders?
For retail traders, the GBP is weak, and could be exploited against stronger currencies. Those seem to be the USD, CAD and AUD at the moment.
Keep your eyes on the news, any major BoE updates or weak economic reports could push the pound even lower.