Fed hawkishness and UK recession risk pushes GBPUSD downwards.
“GBPUSD fell to its lowest level since March 2020 following fears of recession risk.”
Great British Pound plummets against the US dollar, printing losses of more than 13% for the year due to shift in fundamentals. Bears continue to steer the pair as recession risk in the UK accelerates. Based on past data, UK GDP is expected to take a hit in the mid-term, hindering Bank of England to initiate subsequent policy tightening. Moreover, Federal Reserve which keeps their hawkish stance prompt investors to flock into greenback.
Quick Recap on GBPUSD
In an overview, the pair’s structure is skewed towards the downside as prior recovery is limited by strong selling pressure.
GBPUSD Weekly Technical Analysis
From weekly perspective, GBPUSD has recently closed below 1.1800, one of the minor psychological levels.
GBPUSD Daily Technical Analysis
From daily perspective, recent price action suggests possible bulls defending the pair from the downside. Such hypothesis coincides with diminished bearish momentum from MACD.
Trading Idea
ORDER: SELL STOP
ENTRY: 1.1630
STOP LOSS: 1.1730
Target 1: 1.1515
Target 2: 1.1455
ZFX Analyst’s Comment
From a long-term perspective, the pair illustrates significant downside bias due to recent price action. However, be wary of potential short-term recovery as some bears may initiate profit taking from recent plunge.
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