GBP/USD - H1
The pair is trying to halt its post-US CPI plunge today, but could not keep away from fresh 2021 lows and looks like it won't be able to avoid a third straight negative week either.
Inflation fears seem to subside today and the US Dollar deflates at the start of the European session, while larger timeframes show oversold conditions for GBP/USD, giving it the opportunity to take a breath.
From here, a rebound back above 1.3400 is reasonable and such a move would warrant caution for potential short squeeze, but the Pound does not inspire confidence at this stage for retaking its EMA100 (at around 1.3460) and pausing the downward momentum.
Despite that, overall sentiment appears cautious and risk is still heavily skewed to the downside. As such, risk for new 2021 lows (1.3352) remains high and further decline below 1.3300 could follow, even if a larger correction is needed before that. UK's dispute with the EU over the Irish border and talk of triggering article 16 does not do work well for the British currency either.
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Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.