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Sep 26, 2016

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Market Analysis

Home » Technical Analysis » Daily » GBPUSD Poised For More Declines

GBPUSD Poised For More Declines

Posted by FXTimes in Daily - May 16th, 2016 10:52 am GMT

pound-sterling-us-dollar

Key Points

  • British Pound struggled vs the US dollar recently, and broke a couple of important support levels.
  • There was a bullish trend line formed on the hourly chart of the GBPUSD pair, which was broken during the upside move.
  • Recently, the Rightmove House Price Index released in the UK posted a rise of 7.8% in May 2016, compared with May 2015.
  • In terms of the monthly change the Rightmove House Price Index increased 0.4%, less than the last time.

Technical Analysis

There was a nasty downside move in the British Pound vs the US dollar, as the sellers were in control. They managed to break a bullish trend line formed on the hourly chart of the GBPUSD pair to clear the way for more losses.

GBPUSD

The pair is now well below the 100 and 200 simple moving average on the hourly chart, which is a sign that the buyers struggled recently.

One may consider selling rallies as long as the pair is below the 100 hourly SMA, and target a new low below 1.4300.

Rightmove House Price Index

Recently in the UK, the Rightmove House Price Index, which provides a sample of residential property prices in the UK and shows the strength of the UK housing market was reported. The report pointed out that the index rose 7.8% in May 2016, compared with May 2015.

When we look at the monthly change, then the Rightmove House Price Index increased 0.4%, less than the last rise of 1.3%. The report added that “Rush from investors to buy before April 1st helped to ignite an onward chain reaction”.

In short, the GBPUSD may remain under a bearish pressure, as there is no hope for the GBP bulls in the short term.

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