Pound Nears Bearish Channel

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Pound Nears Bearish Channel
Pound Nears Bearish Channel

Pound Nears Bearish Channel

The British pound fell by nearly 65 points against the U.S. dollar on Tuesday, as the BBA Mortgage approvals data failed to give a positive sight of the lending and spending side of the economy. Bears were strong enough to break the critical support level of 1.6015 after which the pair bounced back a little in the U.S., session but closed below this level hence taking the GBP/USD to enter the bearish channel.

Currently the pair is trading at 1.5983 in the Asian session on Wednesday, where a move above today’s pivot point at 1.5995 could lift the pair up to 1.6015, breaking of which could give a relief to the pair where its next targets would be 1.6036 and 1.6058. However, if it makes a move below the 1.5972 mild support level then bears could drag it down to its next support levels of 1.5950, 1.5929 and 1.5909.

Today’s economic indicator for the GBP include the CBI Realized sales, due to be released in the European session.

Euro Bound in Range

The euro remained in a narrow range yesterday where it played in a bearish range of 30 points as it was below its pivot point, but sustained itself above the support level of 1.3462. Currently it is trading at 1.3465 where a move below 1.3462 could take it down to 1.3446, 1.3429 and the last critical support level of 1.3413.

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Investors are eying on the important fundamental of German consumer climate data that may bring volatility in the market in the European session, after which the economic indicators including new home sales and core durable goods orders of the U.S. are due in the U.S. session.

Commodity Currency

Talking about the Australian dollar, it fell against the greenback on Tuesday where it is currently trading in a bearish channel now at 0.9370 and would be good to sell if it remains below the 0.9409 critical resistance level. A move below 0.9365 could take the pair down to 0.9352 and 0.9339.

On the other hand, gold continued to lose against the U.S. dollar and tested the previous support level of 1304.5 where it has now lost all its gains of last week that came in response to the FOMC meeting minutes. Currently it is hovering just below the resistance of 200-EMA on 15 minute chart at 1326 where a move above this level could lift the metal to 1333 and 1341.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com