As we highlighted the possibility on Monday, gold took a big plunge below the psychologically-important and support level of $1300 per ounce yesterday. The breakdown triggered further follow-up technical selling, causing gold to fall for a time below $1270 per ounce.
The dollar has staged a broad-based rally today, which caused the GBP/USD to tumble to a new 31-year low and the EUR/USD momentarily dipped below its 200-day moving average once again.
News that the UK manufacturing activity in September hit its highest level since June 2014 has provided a welcome relief for sterling.
GBPUSD’s downward movement from 1.3445 extended to as low as 1.2914.
GBPUSD is facing the resistance of the downward trend line on 4-hour chart.
The GBPUSD pair fell significantly during the course of the day on Wednesday, as we found quite a bit of resistance in the area of 1.34 above.
GBPUSD remains in downtrend from 1.3278. The rise from 1.3059 is likely correction of the downtrend.
The GBPUSD pair initially tried to rally during the course of the day on Friday but turned right back around to form a shooting star. The shooting star sitting just below the 1.32 level suggests that we could see more selling.
The GBPUSD ended higher last week on the back of surprisingly stronger-than-expected UK economic data and as the dollar eased along with expectations about an imminent rate hike in the US.
GBPUSD is pulling up from its recent slide and looks ready to test the nearby resistance levels. Applying the Fib tool on the latest swing high and low on the 1-hour chart shows that the 38.2% retracement level lines up with a broken support zone around the 1.3100 major psychological mark, which might now hold as resistance.
