The last few days have been very busy for the British currency. Initially, the market witnessed a tense wait for the UK elections, and then, together with the pound, plunged into this process and is now experiencing a decline in post-election euphoria. Experts, however, believe that this condition will be short-lived and the situation will normalize.
After the elections, UK's national currency soared to a dizzying height. The flight, however, did not last long and a sudden drop of the pound soon followed. Watching the dynamics of the "British", you can see that on Monday, December 16, the GBP / USD pair was at 1.3342. However, by the beginning of the next day, radical changes were overdue.
A downward movement finally took over, pushing the pound to head towards the bottom. The first bar on Tuesday, December 17, was at the level of 1.3191. The GBP / USD pair, however, did not stop there and the fall continued.
The next stage was yesterday at the mark of 1.3169. According to analysts, the GBP / USD pair is moving below the upward trend corridor, which increases the probability of a sharp decline in quotes.
Experts believe that the pair will continue to fall towards 1.3044, and this trend was confirmed on the morning of Wednesday, December 18. The GBP / USD pair fell to 1.3104, and further falls became a frightening reality for the market.
According to experts, all significant events such as the UK elections and the issue of "hard" Brexit, which supported the growth of the pound in recent months, have ceased to affect its dynamics. According to experts, all significant events such as the UK elections and the issue of "hard" Brexit, which supported the growth of the pound in recent months, have ceased to affect its dynamics. elections and the issue of "hard" Brexit, which supported the growth of the pound in recent months, have ceased to affect its dynamics. At the same time, experts still admit the probability of the UK leaving the EU without a deal. The issue is still open, analysts say.
At the moment, the post-election euphoria around Brexit, the ratification of which is provided until January 31, 2020, has passed. It was replaced by the realities of the tough stance that the Johnson government will take in negotiations with Brussels over the upcoming deal.
The pound, except for the situation with Brexit, was tripped up by weak UK statistics. The report on the UK labor market, published on Tuesday, December 17, was in the hands of sellers of the British currency, and buyers were out of business. According to the latest data, although experts expected a decline, the number of applications for unemployment benefits in the country has increased significantly. At the end of November 2019, the number of applications increased by 28,000, being much worse than forecasts. At the same time, the unemployment rate in the UK from August to October 2019 remained the same at 3.8%, and unemployment among women fell to 3.5%.
Weak data on the British labor market was the last straw that filled the bowl of the downward trend of the pound. It rapidly went down, and this movement continues to this day.
Many experts believe that the pound has already reached its price ceiling. Only a downward movement is further expected. Currently, the GBP / USD pair is trading at the low levels of 1.3087-1.3088. Nevertheless, the market expects a gradual alignment of the pair and perhaps, a slight rise in the pound. Analysts agree that the moment has come when the "Briton" can return to a more familiar rhythm of daily trading.
According to the calculations of experts, in the near future, it is necessary to prepare for a noticeable decrease in the pound, as with the current situation, coping and stay on the conquered peaks is quite difficult. The pound has managed to rise on a wave of euphoria after the victory of the Conservative Party of Great Britain, but to maintain, and even more so to strengthen its position, was not under force. Many experts believe that the peak of the pound's growth has passed, and their opponents are confident that new victories for pound are still ahead.
