The British pound has hit a new low since July 2010. Recently it has collapsed losing a weak short-term uptrend. This drop was due to a low manufacturing PMI, which stood below the level of 50 points for two consecutive months. You may look at the chart below, we have tried to visualize the timeline in the behavior of this pair. So, in monthly graph you may notice that this pair has broken the uptrend that started in December 2008, and it had three attempts to break this level in May 2010 and June 2012, but the last was critical for pound. This year in February this pair is in an oversold level on the monthly charts. If you look at the RSI indicator, it is marking - 0.13, indicating that at this level there may be a strong technical rebound. On the other hand, the momentum indicator is showing a reversal of the pair for the next few days. If technical rebound does not appear to be the next bearish target for the pound, it is in the 1.4789 fractal monthly. On the other hand a pullback to the break area of the uptrend line will give us an opportunity to sell this pair again at the closure of weekly charts above 1.50, which adds the pound upward movement for the next few days.
If you need personal consultation, contact me via e-mail: gerardo.porras@analytics.instaforex.com
