The British pound is trading around 1.34 after the GBP/USD Forex market has fallen sharply lower. Price action is now below a rising trend line in play since 11 November.
Also helping the greenback is President Joe Biden’s reappointing of Jerome Powell as Chair of the Federal Reserve. Forex traders are also worried about Brexit and coronavirus headlines. All of this has put some selling pressure on the GBP/USD currency exchange rate.
There has been no deal reached on the Northern Ireland (NI) border talks with the European Union. UK Brexit Minister David Frost said on Sky News, “We can’t carry on as we were before.” He went on to say that “If, after Brexit, all we do is import the European social model, we will not succeed.”
President Joe Biden has nominated Federal Reserve Chair Jerome Powell for another term. This helped to support market sentiment at the expense of the British pound. Also, Treasury yields moved higher which supported the dollar.
Today, IHS Markit will publish their November purchasing managers’ indices (PMI), including the composite PMIs, for the United Kingdom, European Union, Germany and the United States. Germany and France will also publish monthly manufacturing numbers.
Daily British Pound Technical Analysis
Looking at the above daily MT 4 chart, the British pound is firmly below the above mentioned rising trend line. The 14 day relative strength index (RSI) is trending lower towards forty which could signal more bearish movement for the GBP/USD Forex market.
On the downside, the British pound has immediate technical support lining up at 1.34. A daily close below 1.34 opens the door to challenge this year’s low price point lining up at 1.3350.
On the upside, the GBP/USD Forex market has resistance lining up at 1.3440. The next upside barrier lines up at 1.3460 with the fifty (50) day simple moving average near the psychological level of 1.35 in focus next.