GBPUSD Analysis

Since the break of the 1.53295 support level on 23, September. GBPUSD has broken 1.51683 three times but was unable to sustain it or to establish a decisive price action below that level.

Click on the chart for a better view.

Investors King won’t be quick to paint a broader bearish outlook as long as the 1.50776 support level that was established in April this year holds but its break will see more selloff and turn the pair outlook downward, which should give us 1.49540.

Though, considering positive economic data coming out of the UK, like current account deficit reduction from £24 billion to £16.8 billion beatings expected £22.2 billion, Investors King is inclined to think we might not see reasonable downside yet, hence, a break of 1.50776 is needed to confirm further bearish.

But on the upside, a sustainable break of 1.51683 should give us 1.5329, above the 20-day moving average and 1.55999.

The UK deficit is important for two reasons, it shows exports are picking up compared with what was widely believed that exports will remain poor due to strong GBP. Two, the data shows that the UK economy is 5.9 percent above the pre-cession peak, 0.7 percent more than the previously estimated 5.2 percent.

On the other hand, the U.S economy has been showing stronger economic growth with an increase in job creations and a surge in personal incomes which is fueling consumer spending, the main catalyst of the US economy since export is still largely on the downside. This explains the low volume of the GBPUSD pair.

Maybe it is better to trade any of these currencies against weaker currencies like I am doing with EURGBP.