The very poor period the GBP has endured since the beginning of the month, with the continuing decline itself against the USD. With today’s price below 1.3000, again it fell from the USD. The United Kingdom’s continuing negative news became the source of this significant price drop. Therefore, because of the higher low wave imprinted on the graph at the last upside move, the technical bias remains bearish.
There are few headlines that played a part in lowering the GBPUSD price;
First of all, manufacturing production dropped its reading from 0.5% to -1.7%. Manufacturing Production is considered as a short-term indicator of the strength of UK manufacturing activity, which dominates much of total GDP. Low reading is therefore considered negative (or bearish) for the UK.
Second, Industrial Production, which also showed a 1.2 percent negative reading as it stood at 0.4 percent in the previous month. Changes in industrial production are widely followed in the manufacturing sector as a major indicator of strength so the low reading is seen as bearish.
In addition, the Gross Domestic Product with a reading of -0.3 percent was also on the UK’s list of unfavorable circumstances. GDP is considered a broad measure of UK economic activity. In general, a downward trend is perceived as negative (or bearish).
The graph below shows the price of GBPUSD, 1.2977, with the two trendlines of resistance just above it, which may not allow the price to pass through it or push it down to the current level.
In the graph above, it is interesting to see that price is supported by many support levels which provide the potential lift-up power so that the price can move in the direction ahead.
However, although being on the bearish trend, there is hope from the forthcoming news that could raise the price, while now there is the danger of investing in it.