GBP/USD has lost its recovery momentum, how low can it go?
|The British Pound is retreating for a second day, returning below the 1.25 level, failing to build on the positive momentum at the start of the week. The pressure appears to be driven by rising government bond yields in global markets, starting with but not limited to the US.
The intraday dynamics of GBPUSD show methodical intraday selling. This is another sign of the rebound’s local exhaustion, and we might expect a new round of declines later.
A pullback of the FTSE100 from the local highs above 7600 is also working against the Pound. The British currency often has a positive correlation to the demand for risks, and its reduction contributes to selling the Pound in forex.
The final point of a new move down could be the 1.1500 area - near the March 2020 low. But before directing the pair to these historical levels, the bears have yet to prove their strength.
The first test of the sellers’ intentions may be in this week’s low, at 1.2430. Should it fail below May’s low at 1.2150, there may be a more meaningful signal. The GBPUSD could make its first move today in case of a sell-off in the equity markets. A move to test 1.2150 could take a couple of weeks
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.