Home » Weekly Forecast » British pound Trades below a Key Falling Trend Line

British pound Trades below a Key Falling Trend Line

British

The British pound remains below a falling trend line as well as below the fifty, one hundred and two hundred (50, 100, 200) day simple moving averages. The benchmark GBP/USD Forex market has been on the defensive since confirming a death cross chart pattern after closing below the 200 day simple moving average.

The overall weak British pound, on Friday, caught a small break as the September U.S. non-farm payroll (NFP) was well short of expectations and a disappointment for a second month in a row. In September, the U.S. added only 194,000 new jobs. This was well below the half million addition of jobs that had been widely forecasted.

The U.S. unemployment rate also fell. This number fell to 4.8 percent as U.S. citizens are leaving the workforce. The monthly labor participation rate also contracted for the month. The labor participation rate fell to 61.6 percent.

However, the disappointing monthly labor data is unlikely to derail the U.S. central bank from scaling back monthly asset purchases in November or December.

The United Kingdom will publish their initial third quarter gross domestic product (GDP). The economic calendars in the euro area and the United States are quiet.

Daily British Pound Technical Analysis (GBP/USD)

Looking at the above daily MT 4 price chart, the bears look to be in control over the GBP/USD currency exchange rate. The 14 day relative strength index (RSI) is near thirty and not in oversold territory. While below the simple moving averages, the British pound remains on the defensive for more possible losses.

There is near term technical support lining up at 1.3540. This level has been in play since September. The 2021 low price point lining up at 1.34 then comes into play. The next downside levels then line up at 1.3310 and 1.3250.

On the upside, immediate technical resistance lines up at 1.3560. The next upside level lines up at the late September high of 1.3750. The next upside barrier lines up at 1.3840 with 1.3910 then coming into focus.

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.

Check Also

bond, dollar, treasury

Dollar Looks to Extend Gains against the Swiss Franc

0.0 00 The U.S. dollar is looking to extend its gains against the Swiss franc. …