British pound breaks down during Tuesday session

The British pound reached towards the lows of last week during the day on Tuesday, as we continue to see a lot of US dollar strength. By doing so, we are slicing through an uptrend line, and if we crumble below the 1.3450 level, that could be very negative for the pound.
Christopher Lewis
GBP/USD daily chart, May 16, 2018

The British pound has broken down significantly during the session on Tuesday, slicing through major uptrend line. If we can break down below the 1.3450 level, the market will more than likely unwind rather drastically. I believe that the 1.30 level underneath would be a bit of a target, with perhaps the 1.33 level offering short-term support. Rallies at this point need to be treated with suspicion, as we have made a slightly lower low at the time of recording in this market. I think that the British pound will continue to suffer at the hands of the US dollar, as quite frankly the Federal Reserve is the only central bank in the world looking likely to raise interest rates anytime soon. That being said, it is likely that there might be at least one interest rate hike out of London, but that pales in comparison to the US situation.

The way we break down during the day tells me that there is a major shift in attitude, and that the trendline is either going to be broken heart, or at the very least is giving way longer-term. That tells me that we have a downward move coming over the next several weeks. This is a trendline the goes back a couple of years, and the fact that it is failed is a very negative sign. Rallies at this point would not be trusted until we break above the 1.35 handle on a daily close, something that doesn’t look very likely.

GBP/USD Video 16.05.18

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.