The British pound has weakened across the board this week. And we see potential for further downside to come. GBP/NZD has depreciated around -1.4% since our prior video, having broken its bullish trendline and suggesting the high has been seen around 2.0.
As for cable, it’s found support around 1.2183 yet 2-year yield differentials between US and UK rates point lower, so we’re waiting for a downside break on GBP/USD. Whilst it may not come in a straight line, we remain bearish whilst prices remain beneath the 1.2413 high.
We’re just a couple of hours away from a slew of UK data which includes industrial, manufacturing and construction output and monthly GDP. It would likely take a broad set of stronger than expected figures to lift GBP from its lows, so any rally below 1.2413 could be appealing to fade into, to anticipate an eventual break lower.
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