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GBP/USD collapses under 1.50 with one-two punch

The strength of the US dollar found a vulnerable pound, especially after  a second PMI upset.

The previous break under 1.50 was just for stop  hunting’s sake, and this time we may be witnessing the real thing.

The British construction  sector is also slowing down. This used to be the stronger  sector in the UK economy. Yesterday’s manufacturing PMI clarified that the rise seen in October was only a one-off in the UK’s weakest link. Tomorrow we have the most important sector: services.

See how to trade the services PMI with GBP/USD.

The strength of the US dollar comes from one upbeat figure and  one hawkish talk from the Fed. ADP NFP beat expectations with a gain of 217K private sector jobs in November, and an upwards revision.

The Fed’s Denis Lockhart leans towards the hawkish side, so his bullishness was not surprising. However, he made it seem like it’s a done deal by saying that it’s going to be a historic event.

The low so far has been 1.4950, which also worked as support in the past. There isn’t much support between this line and 1.48, which is the level that  accompanied Mark Carney’s first days at the BOE.

GBPUUSD crash December 2 2015

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.