Pound Breaking Down – Not Waiting for Data

Posted on April 20, 2009 by Yohay
Filed Under Forex Opinions | 1 Comment

In the wake of the new and and critical trading week, the Pound is tumbling down, seeing levels that haven’t been visited for three weeks. Do this imply the direction when the major indicators are published later this week? 

The British Pound began the forex trading week with a pound – GBP/USD now trades at 14550, falling about 250 pips from last weeks close at 1.4795. This comes hand in hand with a general dollar sentiment.

Although all the currencies (except the Yen) surrender to the dollar, the Pound’s fall is especially sharp. For comparison, check out the EUR/GBP, that is rising by 1%. The Pound is suffering across the board. 

Also do check out the GBP/JPY, which is making the sharpest move, falling by 2%. The Dollar Yen correlation is stronger than ever, with the Yen strengthening even more than the dollar.

The last time that the GBP/USD visited these levels was on April 2nd, when the Pound broke upwards, and even topped 1.50 last week. 

Major British Economic Indicators

This significant weakening comes before any significant figure was released. The only British figure that was released today was the Rightmove HPI, which rose by 1.8%, more than last month’s 0.9%. The fall of the Pound came only many hours after this positive publication. I currently can’t figure out why the Pound is pounded…

This is a critical week for the Pound: CPI, Claimant Count Change, MPC Meeting Minutes, Retail Sales and Prelim GDP are the main economic indicators that are released this week in the UK. The first major indicator is CPI, which will be released tomorrow, Tuesday.

So, are traders expecting the British data to be very weak this week? Does this imply that the Pound will tumble even more? 

After breaking this support line, the GBP/USD has more room to fall. Next support lines are at 1.4240, 1.41 and 1.40. A very interesting week is about to unfold on the British Pound…

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Comments

One Response to “Pound Breaking Down – Not Waiting for Data”

  1. ZEW Economic Sentiment Fails To Lift The Euro | Forex Crunch on April 21st, 2009 12:48 pm

    [...] the 1.29s. I must say that all the currencies lost ground to the dollar due to risk aversion. The Pound suffered much more than the Euro [...]

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