The lower-top, lower-bottom formation in the GBP USD is indicative of aweak market and a down trend. Yesterday’s reversal top and today’sfollow-through to the downside suggests that this market can correctback to 1.6283 to 1.6212.
The lower-top, lower-bottom formation in the GBP USD is indicative of a weak market and a down trend. Yesterday’s reversal top and today’s follow-through to the downside suggests that this market can correct back to 1.6283 to 1.6212.
Fundamentally, the British Pound remains weak as the U.K. economy is still showing signs of weakness and the money isn’t in the budget to bail it out. Today’s weakness is being fueled by the report that the U.K. Gross Domestic Product fell more than expected. Pre-report estimates were for a decline of 0.3 percent, the actual figure was a decline of 0.8 percent.
The weakening chart pattern combined with the bearish GDP news should serve as a reminder to investors that the U.K. economy is still suffering through a recession. The recent rally from the lows in early July was driven by demand for risk. Today’s break is a sign that British Pound traders may be refocusing their trading decision on the condition of the U.K. economy.