The British Pound lost against the US dollar as the post –Brexit concerns started to loom on the market again. The strength of the greenback was slashed in the previous sessions, however, the sterling failed to protect its gains. Can the British currency tick higher before the Christmas Holiday.
After the opening bell on Thursday, the sterling opened at 1.23608 against the greenback with a session high of 1.23626 and a session low of 1.23366. GBP/USD settled at 1.23381 at the time of writing, losing 0.11 percent.
As the hourly GBP/USD chart shows, the pair crossed its 20-day SMA of 1.23561 and 50-day SMA of 1.23624. The close trading figures of the pair were reasonable as the band started to contract. GBP/USD found resistance at 1.23710 and surpassed its support at 1.23483.
In the wider perspective, the pair was likely bearish as it ticked closed to 1.23500 levels. In case the fall through continues, the new support will be at 1.23185. On the other hand, a breakthrough will result in a new resistance at 1.23765.
The downtrend will push the pair down to 1.2300 levels before the end of Thursday session. Meanwhile, as the market waits for the US job data and other economic report, the greenback may stay volatile. During these hours, the sterling may take advantage the situation and move a tad higher.
Elsewhere, the euro snatched 0.24 percent advantage against the US dollar while the Swiss Franc managed to tick 0.20 percent higher than the greenback. As of 11:08 UTC, here are the exchange rates of the British Pound.
GBP/ BRL 4.10577 (up)
GBP/CHF 1.26465 (down)
GBP/JPY 145.110 (down)
GBP/AUD 1.70881 (down)
GBP/CAD 1.65924 (up)
The sterling was challenged again by the total exit of Britain from the European Union. As the discussion would about to resume, the skepticism in the British Market loomed. Adding to this, nervous trading emerged ahead of the Christmas Holiday.
Back in June, when the UK referendum was concluded, the British pound suffered alongside with the Euro as the investors turned anxious over the future of their respective economies. Brexit also knocked down the forex market for a while.
In the recent statement of Richard Martin, managing director in IMA Asia, he noted the probability of the mixed sentiments over the UK economy in the following year.
“What will become clearer as we move through 2017 is that Britain just unhooked itself from the single biggest market in the world. The European Union is a bigger market than the United States' market,” Martin explained.
“As you move up to Brexit and you take Britain out of the EU, that track is likely to stop at the channel. It's going to be inspected, all the goods will have to be recertified and there may be taxes to pay and that's the end of using Britain as a manufacturing base for the European Union.”
Considering the upcoming volatility, the British currency will likely stay in the defensive ground in the following days. Although the US dollar retreated, this momentum will only be limited as the Fed signaled for three more rate hikes in 2017. The strength of the greenback will continue to wane the gains of a basket of currencies.
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