- – The British Pound struggled a lot lately and traded below 1.2400 against the US Dollar.
- – There is a bearish trend line formed on the 4-hours chart of GBP/USD, acting as a resistance at 1.2400.
- – The UK Net Borrowing released by the National Statistics posted a reading of £12.210B in Nov 2016, more than the forecast of £11.300B.
UK Net Borrowing
The fundamentals were not good for the British Pound, which kept on increasing pressure. Today, the Net Borrowing figure was released by the National Statistics. The market was aligned for the amount of new debt held by the U.K. governments (the financial deficit in the UK national accounts) to post £11.300B in Nov 2016.
However, the result was on the lower side, as the Net Borrowing came in at £12.210B in Nov 2016. It was also a lot higher when compared with the last revised reading of £4.324B.
The report stated that “Public sector net borrowing (excluding public sector banks) decreased by £7.7 billion to £59.5 billion in the current financial year-to-date (April to November 2016), compared with the same period in 2015”. In short, there was nothing to cheer for the GBP bulls, which may ignite more losses in GBP/USD.
GBP/USD Technical Analysis
The British Pound this past week made a downside move and traded below a major support area of 1.2580. There was a bullish trend line on the 4-hours chart of GBP/USD at 1.2580, which was breached along with the 100 simple moving average.
Later, the bearish momentum was increased, taking the pair below the 1.2400 support and the 200 simple moving average on the H4 chart. The pair traded as low as 1.2312. There was a recovery attempt made recently, but the upside was prevented by a bearish trend line formed on the 4-hours chart of GBP/USD at 1.2400.
The pair is once again heading lower, and it looks poised for a test of 1.2310. There is even a chance of a break of the stated level for a full test of 1.2300. Any recovery from the current levels may face sellers near the 23.6% Fib retracement level of the last drop from the 1.2720 high to 1.2312 low.
Tags: British Pound, GBP, GBP/USD Technical Analysis, US Dollar, USD