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British Pound (GBP) Latest: GBP/USD Will Likely Fall Further, FTSE Up

British Pound (GBP) Latest: GBP/USD Will Likely Fall Further, FTSE Up

Martin Essex, MSTA, Analyst

GBP price, news and analysis:

  • GBP/USD dropped through trendline support Tuesday and now faces a further fall to the 200-day moving average at 1.2655. If that fails to hold, more weakness can be expected.
  • The UK announced new restrictions on pub and restaurant opening times Tuesday after a surge in Covid-19 cases this month and warned that the measures could last for six months.
  • Meanwhile the FTSE 100 is benefiting from the weakness of GBP.

GBP/USD heading lower still

GBP/USD continues to weaken on concerns about a lackluster economic recovery globally, spurring further risk aversion in the markets and lifting the safe-haven USD to a two-month highs as measured by the USD index.

GBP/USD Price Chart, Daily Timeframe (July 17 – September 23, 2020)

Latest GBP/USD price chart.

Chart by IG (You can click on it for a larger image)

The support level that broke Tuesday was a trendline connecting the recent daily lows. Now, a drop to the 200-day moving average at 1.2655 is plausible and, if that breaks, there is little further support ahead of the mid-July lows.

Sterling traders have taken badly news of fresh curbs to avoid a second wave of Covid-19 infections in the UK, and the consequent weakness in GBP/USD has helped lift the FTSE 100 index of the largest London-listed stocks – many of which have overseas earnings and therefore benefit from a weaker Pound when those earnings are repatriated to the UK.

FTSE 100 Price Chart, Daily Timeframe (July 17 – September 23, 2020)

Latest FTSE 100 price chart.

Chart by IG (You can click on it for a larger image)

We look at the markets regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

You can also find out here about stock market volatility and how to trade it

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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