GBP USD Likely to Reach 1.6198 Over Near-Term

The GBP USD is getting clubbered this morning after it was reportedthat the U.K. recession unexpectedly extended into its 6th straightquarter.

Daily Analysis

GBP USD

The GBP USD is getting clubbered this morning after it was reported that the U.K. recession unexpectedly extended into its 6th straight quarter.

The U.K. Gross Domestic Product dropped 0.4% in the 3rd quarter versus pre-report guesses of a 0.1% rise.

This news shocked traders who had been driving up the GBP USD in anticipation of the start of a recovery and an early exit by the Bank of England from its asset-purchase program.

Today’s report means the Bank of England is likely to keep interest rates at historical lows for a prolonged period of time and continue to fund its asset buyback program.

The chart indicates a main range of 1.5706 to 1.6691.  This range forms a retracement zone at 1.6198 to 1.6082.  This zone is the first downside target especially since the GBP USD is in a position to post a daily closing price reversal down. 

This market is likely to accelerate to the downside once uptrending Gann angle support at 1.6346 is violated today.

Daily Chart

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