GBPUSD Rate Touched Pre-Brexit Levels and Begins To Fall
The early weeks gains have begun to fade for GBPUSD. After an indifferent start to 2018 cable finally found it’s mojo again in mid March to continue the climb from the horrendous lows of 2017.
Last week seen the GBPUSD rate close positive every day, and Monday began with a follow through until in early Tuesday trading it fell just short of the 1.4400 level.
This is a significant level as it’s the area where GBPUSD was trading right before the Brexit vote back in June 2016.
This sharp reversal in the British Pound seemed to be triggered by the Average Earnings Index data missing its forecast, and Claimant Count numbers increasing for the previous month.
The Claimant Count figures could have been an important warning of what’s to come. Notes from ForexFactory tell us,”It’s the first indication of the employment situation, released a month earlier than the Unemployment Rate.”
This possibly began to trigger a few large positions, selling at the highs or going short.
Today, data missed again with CPI down year on year, and up next for GBP is Retail Sales data.
A miss on all these key data points could see the weakness continue into the end of the month as traders await the next BoE interest rate decision. Always a big mover for the good old British Pound.
Next week the Euro should be quite active as the ECB publishes the minimum bid rate on Thursday accompanied by the widely followed ECB press conference.
There’s always some volatility in the markets once the press questions begin to be answered. Firstly a pre written statement is read then follows the question and answer session. Off the cuff comments by the President and Vice President can often swing the Euro rate sharply for the rest of the trading session.
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.
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