GBP/USD started the week face down – it broke the support line of 1.3950, due to bad news from British banks that continue to pour. Where will the fall stop or at least pause?
GBP/USD now trades at 1.3930, breaking the support line at 1.3950. This line was drawn last week, as the British Pound went under 1.40 but didn’t continue lower than 1.3960.
Now it makes the fall against the dollar and also against the Euro. EUR/GBP is up above 90 once again. The Euro has its own problems, so EUR/GBP Parity isn’t near.
HSBC investors fear that the huge financial group base in London will have to erase assets due to bad loans. These fears sent HSBC stock down in Hong Kong and in London.
This adds to the move made by the British government during the weekend on Lloyds TSB. British Bank Nationalization isn’t good for the pound.
Also other currencies are losing ground against the US dollar, but the fall in the British Pound is the sharpest move, and one that breaks the support line. It comes during hours that no economic indicators are released.
The British Pound’s moves will be interesting to follow during this week.