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British Pound Remains Weak against the Greenback


The British pound remains under pressure against the U.S. dollar. The GBP/USD currency exchange rate is trading around 1.34 to 1.3415 headed into Tuesday. Forex traders are pessimistic about the coronavirus and waiting on labor data out of the United Kingdom.

The UK will publish their monthly claimant count change as well as their monthly jobless rate. The British pound also ignored hawkish commentary from Bank of England (BOE) Governor Andrew Bailey overnight.

Currency traders are more interested in Brexit. The United Kingdom is making noise about triggering trigger Article 16. This is a key clause which will allow Britain to unilaterally avoid Brexit compliance over the Northern Ireland borders. However, UK Prime Minister Boris Johnson mentioned keeping the agreement with the European Union is still preferable.

The United States will be releasing monthly headline and core retail sales data. The U.S. will also publish monthly industrial production data. With the Federal Reserve worried about high inflation, they will monitor retail sales to see if Americans are buying big ticket items. The European Union will publish their second look at their quarterly gross domestic product (GDP).

Daily British Pound Technical Report

Looking at the above daily MT 4 price action chart, the 14 day relative strength index (RSI) is below the mid-line but not in oversold territory. The 14 day MACD histogram is also sloping lower. The British pound is also trading below the fifty (50) day simple moving average which lines up around 1.3668. 

On the upside, the first layer of technical resistance lines up at 1.3465. A daily close above 1.3465 will open the door to challenge a cluster zone in play at 1.3565 to 1.3570. 

On the downside, the GBP/USD Forex market has immediate technical support lining up at 1.34. The next downside barrier lines up at 1.3340 before 1.3328 comes into play. The next support level lines up at 1.3301.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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