by FXOpen on December 5th, 2018

The GBP/USD pair remains in a downtrend

The British Pound on Wednesday morning remains under pressure against the US dollar. A sharp strengthening of the US dollar last night counted against the Pound. In general, the entire Tuesday session turned out to be too volatile for the British currency. At first, the GBP rose on a ground of good statistics and neutral news on Brexit, but then sellers entered the market.

The US President Donald Trump said on Tuesday in his Twitter about the possibility of introducing new import duties on China, if the 90-day truce in the trade opposition is not used very effectively. Trump wants a “real” agreement and is sure that eventually, it will appear. This, however, does not prevent the political leader to excite the market with sharp statements.

The threat to intensify the “trade war” in the neutral period of negotiations scared the foreign exchange market, forcing investors to move away from risks in “safe” assets, and the US dollar in the first place. For the volatile pound, this was an additional reason for the “failure”.

The British Pound failed to break the 1.2835-40 resistance zone recently and declined sharply against the US Dollar. The GBP/USD pair broke the 1.2770 and 1.2725 supports to enter a bearish zone.

The pair even traded below the 1.2700 level and the 50 hourly simple moving average. A low was formed near 1.2660 and later the pair bounced back above 1.2680 and 1.2690.

The pair is currently consolidating near the 1.2700 resistance area. On the upside, there is a major resistance formed near the 1.2735 level, the 50 hourly SMA, and the 38.2% fib retracement level of the last decline from the 1.2839 high to 1.2659 low.

Therefore, if the pair corrects higher from the current levels, it could face a strong resistance near the 1.2725, 1.2735 and 1.2740 levels in the near term.

By FXOpen

FXOpen is a Forex and Cryptocurrency broker founded in 2005 by a group of traders. With over 10 years of experience, the company has established itself as a major Forex broker that continues to expand rapidly across the globe. FXOpen offers the MT4 and MT5 Forex trading platform with a wide range of trading instruments including 100+ FX, CFDs, Indices and Cryptocurrency markets. FXOpen also provides its own PAMM technology allowing clients to benefit from the strategies of professional traders with a proven track record of successful trading. The FXOpen Group also includes the ASIC regulated FXOpen AU in Perth Australia and the London-based FXOpen UK that is regulated by the FCA.