- GBP/USD keeps bleeding as the greenback strengthens across the board into the late hours of the North American session.
- GBP/USD has made a fresh low of 1.2887 from a high of 1.2963.
GBP/USD is currently trading up from the fresh lows of 1.2896 and below prior short term trendline support as the DXY break 98 handle and reaches for blue skies up at 98.19 the high so far. A series of risk off trades are in play which can be associated to a string of geopolitical uncertainties and general divergence between the U.S. economy and competitors, such as the EU. For instance, if we take Germany as an example, and baring in mind that the euro contributes a 57.6% weight to the DXY, EUR bulls ended up bitterly disappointed over the German manufacturing PMI Index last week which proved that it remains deep in contraction territory (at 44.5 in April) while today’s IFO business surveys kicked the bulls when they were already down.
Pound is continuing in its weaker trend
Domestically, the pound is continuing in its weaker trend that has been evident since the middle of March with a target of GBP/USD1.2773 in view as being the February 2019 low due to the damage that is being inflicted on the UK economy by the prolonged Brexit and the UK’s political uncertainty – Indeed, which will also be harmful to the EZ and the ECB’s and BoE ability to govern the stability of the economy effectively – Indeed, the dollar is an attractive safe meanwhile play overall.
GBP/USD has eroded deeper below the 200-day ma and the 20-week ma and is en route for a test of the 50% Fibo of the 2019 post flash crash range located at 1.2876. Eyes are on the 61.8% Fibo target at 1.2757 below the Feb swing low at 1.2773.