The British pound has been crushed by the U.S. dollar. The GBP/USD currency exchange rate has fallen out of a long term trade range, towards the downside. The so called death cross chart pattern noted back in September has been completed as this key Forex market remains under heavy selling pressure.
The U.S. Federal Reserve is signaling imminent tightening of monetary policy. The United States narrowly avoided a government shut down last week and President Joe Biden’s key fiscal infrastructure spending plan is far from being approved by Congress.
There is a lot of dissention within his own Democratic Party holding up the vote. Also, the United States is not even close to fixing the debt ceiling which could see a default within the month. This is boosting safe haven currencies like the dollar over the British pound.
The United Kingdom is experiences a shortage of truck drivers which is delaying shipments of fuel and other goods. The British armed services has been deployed to assist. Today, the Organization of Petroleum Export Countries with non-member allies called the OPEC + are meeting.
The United Kingdom has no economic data on the calendar. The United States will publish monthly factory orders. The European Union will hold their Eurogroup meeting and publish their monthly Sentix consumer confidence survey.
Daily British Pound Technical Analysis (GBP/USD)
Looking at the above daily MT 4 price action chart, the momentum indicator has moved sharply lower. The 14 day relative strength index (RSI) has moved out of oversold signaling possible further losses ahead for the GBP/USD Forex market.
The British pound has immediate technical support lining up at 1.3410. This is the 2021 low price point. The next downside barrier, actually next three have not been seen since 2020. The first downside level to watch is 1.3310 with 1.3250 coming into play next. The next layer of technical support lines up at 1.3190.
On the upside, the first level to monitor comes into play at 1.3570. The next layer of technical resistance is at 1.3640 with 1.3750 then popping up on the radar.