Friday, November 13, 2020

Lower Pound Performance, GBP / USD Continued Lower

The pound sterling showed the lowest performance against other major currencies on Thursday trading was crushed by weak economic data apart from Brexit uncertainty.


Preliminary reading of UK Gross Domestic Product (GDP) growth for the third quarter recorded an increase as expected. However, some other economic data published together such as industrial production and UK manufacturing recorded weak readings.


This is seen as adding pressure to the Pound trade which is still plagued by concerns over the Brexit negotiations that continue to falter between the UK and the European Union (EU).


Although some other major currencies traded higher against the US dollar yesterday, the opposite happened to the Pound as it continued to depreciate.


On the GBP / USD currency pair chart, the price continued to decline after testing the 1.33000 high on Wednesday.


Yesterday's trading saw the price move below the Moving Average 50 (MA50) barrier level within the 1 hour time frame of the price movement showing a bearish trend.


Prices have dropped past the RBS zone (resistance become support) 1.32000-1.31500 until the daily low reached around 1.31100 at the end of the New York session.


Continued trading in today's Asian session (Friday) moved slowly and horizontally at the previous session's closing level with the expectation that prices will continue.



The RBS zone around 1.30600 will be the support zone for the price before further decline is seen to return to the focus level of 1.30000.


On the other hand if the price makes a reversal, the level of 1.32000 in the focus zone will be resistance and will signal a trend change on the GBP / USD chart.


Next, the 1.33000 resistance zone will be re-tested for investors to evaluate the price reaction on the important zone.