Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

British Pound has Found a New Bottom

By Andrey GoilovCurrenciesSep 26, 2022 12:13
uk.investing.com/analysis/british-pound-has-found-a-new-bottom-200537956
British Pound has Found a New Bottom
By Andrey Goilov   |  Sep 26, 2022 12:13
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
TGTB34
0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
    The Pond Sterling is plummeting against the USD. On Monday, after retreating to and testing 1.0350, which is the lowest bottom since 1985, GBP/USD has returned to 1.0590.
    However, it’s not only because of the strong “greenback”, which is currently having a significant influence on other traded currencies. The GBP rate drop is also supported by raising concerns about British economic health, and these concerns are pretty huge.
    Last Friday, the British chancellor announced a £45-billion tax cut package, which is expected to be the biggest in the last 50 years. The package is the result of already introduced plans of the British government to compensate for electricity expenses for the country’s population and businesses. The most part of these compensations will be financed from selling government bonds.
    All this is happening amid the benchmark interest rate hikes announced by the Bank of England. To reduce Pound volatility, the regulator must raise the rate by 100 basis points or more. However, the BoE is highly unlikely to do it.
        As we can see in the H4 chart, after finishing the descending wave at 1.0853 and forming a new consolidation range there, GBP/USD has broken it to the downside to reach the short-term target at 1.0350. Possibly, the pair may correct to test 1.0850 from below and then resume trading downwards with the target at 1.0130, or even extend this structure down to 0.9967. From the technical point of view, this scenario is confirmed by the MACD Oscillator: its signal line is moving below 0 and may continue falling to reach new lows soon.

GBP/USD forecast
GBP/USD forecast

        On the H1 chart, GBP/USD has completed the third structure within the descending wave towards 1.0305. Today, the pair may correct to reach 1.0588, or even extend this pullback up to 1.0850. Later, the market may resume trading within the downtrend with the target at 1.0130. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: its signal line is moving above 20. In the future, it may grow to rebound from 50 and resume falling to return to 20.

GBP/USD forecast
GBP/USD forecast
Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

British Pound has Found a New Bottom
 

Related Articles

ING Economic and Financial Analysis
FX Daily: Dollar Correction Extends By ING Economic and Financial Analysis - Dec 01, 2022

USD: Overreaction? The US dollar came off sharply late yesterday on comments from Federal Reserve Chairman Jerome Powell which signaled that December would probably be the...

Shane Neagle
Has the U.S. Dollar Officially Peaked? By Shane Neagle - Nov 29, 2022

The U.S. dollar is trading near multi-month lows against its major counterparts on expectations the Federal Reserve may slow down its hiking campaign. The pullback in the dollar...

Andrey Goilov
EUR/USD is Ready to Decline By Andrey Goilov - Nov 28, 2022

On Monday, the market major is stepping back to 1.0350. Investors are demanding more safe haven assets because the global situation is worsening. Attention is focused, on the one...

British Pound has Found a New Bottom

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email