GBP/USD Free Fall Continues – 1.60 Getting Close

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After GBP/USD started the year by blasting the triple top and reaching a 16 month high, its fate changed and it became all downhill. The latest leg down came from a weak services PMI figure. After a drop of 360 pips, will 1.60 provide support?

GBP/USD is now trading at 1.6019, down from a peak of 1.6380 a few days ago.

GBP USD Free Falling January 4 2013

GBP USD Free Falling – Click image to enlarge

The announcement of the fiscal cliff deal turned out to be an opportunity to sell. Doubts about the deal, together with weak figures from the UK and the not-so-dovish FOMC minutes hurt the pound.

Services PMI came out at 48.9 points, below the 50 point line separating between contraction and growth. This was worse than 50.4 points that was expected. This is important as this is the biggest sector. Also the construction sector disappointed with a score under 50 yesterday.

The 1.60-1.63 has characterized the pair several times in recent years. If 1.60 is broken, there is some support at 1.5910, with more serious support at 1.58. For more on the pair, see the British Pound forecast.

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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.