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Pound lost ground

Market Analysis
2017-03-24_15-27-38

GBPUSD, H4

Yesterday I wrote that “GBPUSD has stormed higher in the wake of the Retail Sales data, making new week high above 1.2500. However, it seems that Brexit concerns have not taken away, with Article 50 to be triggered next week, and hence cable to presents a strong resistance at 1.2500. Even though cable has extended post UK data rally earlier, making month highs at 1.2530, the missed of closing above that significant point as presented in the 4-hour chart, indicates a weakness of the pair within the day…………. cable is likely to move from now onwards lower to the 1.2450-1.2470 area.

Cable was knocked back under 1.2500 overnight after a run to 1.2507, turning well short of yesterday’s four-week peak. The pair is showing a 0.3% decline on the day, and the pound is also showing losses against the euro and yen. On the week, the quid is mixed, up 0.8% versus the dollar, fractionally firmer versus the euro, but down by 0.7% versus the yen. GBPUSD bearish move is slightly strengthened on the sound of U.S. data release.

Currently Cable traded at 1.2480 while a breakout of 1.2460 might lead to a further weakness, promoting a decline to 38.2 Fibonacci level (i.e. 1.2425 – 1.2435 area). Lastly, Pounds weakness can be well observed in EURGBP 4-hour chart, which present a smooth recovery of Euro against pound. The euro has been underpinned by PMI data with the flash readings of the March surveys beating forecasts.

2017-03-24_15-28-46

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Andria Pichidi

Market Analyst

HotForex

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