Wednesday, October 05, 2016
GBP/USD Reached a Historical Low but the Drop Probably Isn’t Over Yet
GBP/USD effortlessly broke below the support trendline at 1.29500 and did so forming a 50-pips gap that still hasn’t been recovered and continued falling sharply. For the past day and a half the pair has reached its lowest historical level at 1.26851.
By drawing all trendlines of the drop from the 1.34442 level we can conclude that it is quite possible for the move to the downside not be over yet.
Despite that it’s logical to expect a correction, considering that the market is already anticipating the announcement of the US NFP data this Friday, which usually has a considerable effect on the currency trade.
In case the data is positive for the American economy we can likely expect a new drop towards one of the support trendlines.
In the alternate scenario there will be a corrective move to the upside.