Breaking: GBP/USD plunges below 1.3000 on poor data, Brexit, and a stronger USD

Yohay Elam FXStreet

GBP/USD collapses below 1.3000, the lowest in two weeks. It has reached 1.2962 at the time of writing. The move continues.

There are three reasons for the fall:

1. Three weak purchasing managers' indices that indicate a stagnating economy. The latest was for the largest sector: services. The Services PMI came out at 50.1 for January, reflecting no growth whatsoever.

2. Concerns that Brexit is going nowhere as May caters to the hard-Brexiteers. UK PM Theresa May is in Northern Ireland ahead of a meeting with European Commission President Jean-Claude Juncker on Thursday. The Irish backstop remains unresolved.

3. An ongoing recovery of the USD, nearly a week after the Fed decision. The greenback is gaining ground against the euro as well. However, the pound is losing ground against the euro as well.

Here is how it looks on the chart. Pound/dollar has support at 1.2940 and then only at 1.2855. Resistance is at 1.3050 and 1.3105.

GBP USD technical analysis February 5 2019

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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