GBP/USD Plunges to New Multi-Decade Lows After UK Rate Hike

The GBP/USD currency pair on Friday plummeted to a new multi-decade low of about 1.0860 after the latest round of UK data. The currency pair seems to be trading within a sharply descending channel formation in the 60-min chart.

The pair has now slumped to trade several levels below the 100-hour moving average line. As a result, the currency pair is now trading deep into the oversold conditions of the 14-hour RSI.

GBP/USD Fundamentals Overview

From a fundamental perspective, the GBP/USD currency pair is trading at the back of a relatively busy period in both markets. On Thursday, the Bank of England raised the base interest rate by 50 basis points to 2.25% up from 1.75% in line with expectations. On Friday, the preliminary S&P Global/CIPS Manufacturing PMI for September outperformed the expectation of 47.5 with a reading of 48.5. On the other hand, the S&P Global/CIPS Services PMI missed the forecast of 50 with 49.2, while the Composite PMI came short of 49 with 48.4. Elsewhere, the UK Consumer Confidence for September missed the expectation of -42 with -49.

In the US, the preliminary S&P Global Manufacturing PMI for September outshone the estimate of 51.1 with 51.8. On the other hand, the Services PMI beat 45 with 49.2, while the Composite PMI came ahead of expectations with 49.3 versus 44.7. Earlier in the week, the Federal Reserve raised the base interest rate by 75 basis points, in line with expectations, to 3.25% up from 2.5%. The initial jobless claims for last week also beat the estimated claim count of 218k with a tally of 213k.

GBP/USD Technical Analysis (the 60-min Chart)

Technically, the GBP/USD currency pair seems to be trading within a sharply descending channel formation in the 60-min chart. This indicates a strong short-term bearish bias in the market sentiment.

Therefore, the bears will be looking to stretch the slump towards 1.0766 or lower to 1.0656. On the other hand, the bulls will be targeting potential rebound profits at about 1.0997 or higher at 1.1097.

GBP/USD Technical Analysis (the Daily Chart)

In the daily chart, the GBP/USD currency pair seems to be trading within a gently descending channel formation. This indicates a slight long-term bearish bias in the market sentiment.

Therefore, the bears will be targeting long-term profits at about 1.0496 or lower at 1.0130. On the other hand, the bulls will be looking to pounce on profits at about 1.1240 or higher at 1.1606.

Copyright © 2022. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.