By James Chen @JamesChenFX, chief of technical strategy at City Index
GBP/USD (daily chart shown below) continues to be weighed down in the face of renewed US dollar strengthening against major global currencies, and appears to be poised for a further breakdown.
Currently nearing the one-year low of 1.5584 that was just established earlier in the week, GBP/USD is firmly entrenched within a strong downtrend that has been in place for more than four months since the 1.7190 multi-year high in mid-July.
The sharp drop since July, which represents more than a 9% decline down to this week’s noted 1.5584 one-year low, has consistently traded underneath a well-defined downtrend resistance line as well the 50-day moving average.
Having recently consolidated in a bearish flag pattern, the currency pair has since made a slight break below that pattern, tentatively confirming a continuation of the current downtrend.
Click here to read the full article on City Index.