GBP/USD: All ways lead to red – Elam

The negotiation of the new relationship between the United Kingdom and the European Union and data from the United States are leading GBP/USD to bearish territory, Yohay Elam from FXStreet reports.

Key quotes

“Fresh tensions between London and Brussels explain part of GBP/USD's downfall – near 300 pips since Friday and hitting the lowest levels since mid-December.”

“While stocks are moving from falls to recoveries, the greenback is one of the currencies of choice. Contrary to last week's dollar dumping – correlated with sliding US bond yields – the world's reserve currency is enjoying higher demand now.” 

“The ISM Manufacturing Purchasing Managers' Index beat expectations by rising to 50.9 – a jump of over three points and reflecting a return to growth.”

“GBP/USD fell below the 50, 100, and 200 Simple Moving Averages on the four-hour chart. Moreover, it dropped below the uptrend support line that had accompanied it since mid-January and momentum turned negative.”

“GBP/USD continues battling 1.2955, the low point in January. Further down, 1.29 is a round level and also worked as support in mid-December.“