The EUR is not too stellar a performer today, but it is the GBP which is the weakest currency in trading. Looking at the graph below, the GBP is down against all the major currencies in trading today – falling the most against the USD.
GBP is the weakest currency today and is lowest against the USD
The move lower has been on the back of relative weakness yesterday and then weaker than expected inflation data out of the UK which took the market by surprise.
From a technical perspective, the selling the price below the all-important 50% retracement of the move up from the 2013 low to the 2014 high, and the 200 week moving average, which comes in this week at 1.6013.
GBPUSD hourly chart shows the sharp fall today. Risk at the old 2014 lows now.
There really wasn’t much of a fight put up at this level today as momentum to the downside was already started before the release. This is a key break though and helped to contribute to the trend trading conditions today.
In the trend move lower the price has now taken out the low for 2014 at the 1.59507 level. This is now close resistance/RISK for traders in the New York session. Stay below , and the trend day down can continue. The bears remain in control.
The momentum has taken the pair to a new 2014 low at the 1.5903 at the extreme. The range today is a a whooping 196 pips from the high to the low – well above the 118 average over the last month of trading – but this is a trend move and trends area fast, directional and have larger ranges than traders expect. So I respect the move and would expect sellers on corrections Look for corrections toward the 1.5950 area to contain rallies. Can a new low be made? Yes. I would not rule it out.
GBPUSD made new 2014 lows and is trading at the lowest level since November 2013
The next key downside target comes in at the 1.5853. This is the low price from November 2013. Not far from that level is a bottom trendline coming in at the 1.5843 level today (see daily chart above). If by chance the GBPUSD totally falls apart, look for good buying against this level.
Trends are fast, directional and go farther than traders think. The GBPUSD is in the midst of a trend move today. I respect it.
