The British Pound appears to have recently switched to down mode. On the political side, there is a lull at the moment, as the British Parliament is on summer holidays until the beginning of September. But today at 10:30 a.m. German time various economic data from Great Britain hit the ground. And they were pretty bad.
In the second quarter gross domestic product rose by only 1.2% year-on-year compared with 1.8% in the previous year. The forecast for today was +1.4%. Industrial production in June fell by 0.6% year-on-year, although only -0.2% was expected. Construction output falls by 0.2% year-on-year, etc, etc, etc! So, the economic data in Great Britain are darkening. On the island there is almost a double effect. On the one hand the Brexit, and on top of that the already difficult economic situation in Europe and the rest of the world!
As a result of the data the pound is currently highly susceptible to further slippage
Shortly before 10:30 a.m. the Pound vs. the US Dollar was still at 1.2122. It then fell sharply to 1.2087 in the low to recover to 1.2108 by now. However, the trend in the chart is “still weakening”, so let’s put it this way. Of course this does not mean that further falling prices are guaranteed! The following chart shows Pound vs USD since July 26th. The Pound had fallen sharply. Then last Thursday it entered a really boring sideways phase. On the far right of the chart you can see the current small crash. If the Pound now falls only a little further below 1.2080, it will fall down out of this sideways phase. Lower prices will be conceivable from a chart technical point of view.
The larger picture shows in Pounds at about 1.20 a low from January 2017, which could serve as a penultimate barrier on the way down. After that, only the low of October 2016 at 1.15 is left. At that time, however, this was rather a chart technical exaggeration. So, there is a lot of room in the chart to go down for the Pound. There are currently only 30 pips left. If it swooshes below the 1.2080 level, it could become gloomy. These current data currently dominate the Pound against the USD. Can the market now be tempted to push the price further down before the weekend?