The British currency remains under pressure from the broader market trend, where the key driver is the movement in crude oil prices. Rising oil prices support the pound against the dollar, while falling prices lead to a strengthening of the U.S. currency. This dynamic has taken hold this week and represents the main overarching trend across all markets except the bond market.
From a technical perspective, the pair has fallen below the 1.3385 level, which may lead to further short-term decline until the situation with oil price dynamics changes again.
Technical picture and trading idea:
The price is above the middle line of the Bollinger Bands, below the 5-period SMA, but still above the 14-period SMA. The RSI is above the 50% level but is actively declining. The Stochastic indicator is also falling and crossing below the 50% level.
A consolidation below 1.3385 could lead to a decline toward 1.3250 as early as next week. A potential entry point for selling could be around 1.3370.
