The Cable has crashed in the early morning versus all its counterparts, has registered an amazing drop versus the greenback, the GBP/USD was expected to drop further, but not so sharply on the short term. The GBP/USD has reached the lowest level after 1985, has jumped back after the massive drop, but now is going down again, the pair remains under immense selling pressure. Personally, I don’t believe that the rate will fall below the morning low from 1.1809, is very hard to believe that the rate will reach new lows in the coming period, most likely will try to make a consolidation somewhere above the 1.2 psychological level.
The United Kingdom data have come worse again today and have weakened the Pound, the Industrial Production has fallen by 0.4%, even if the economists have predicted a 0.1% growth, the production has decreased again after 2-month increase. Moreover the Manufacturing Production has increased by 0.2%, less than the 0.4% forecast, the production has increased after 2-month decrease, while the Goods Trade Balance has dropped further, from -9.5B to -12.1B, more versus the -11.1B estimate. The Halifax HPI rose by 0.1%, more than the 0.0% estimate, has increased sharply after the 0.3% drop from the previous reading period.
We may have some action later on the GBP/USD as the US is to release high impact data, the Non-Farm Employment Change may increase from 151K to 171K jobs, while the Unemployment Rate could remain steady at 4.9%, could remain on hold for the fourth month in September. The Average Hourly Earnings may increase by 0.2% in September, could increase more than the 0.1% from August and could help the USD to jump much higher on the short term. Will be better if you’ll keep an eye on the economic calendar in this afternoon, because the fundamental factors will drive the currency pairs in the upcoming hours.

You can see on the Daily chart that the rate has plunged much below the lower median line (LML) of the medium term descending pitchfork, the LML has represented a very strong support, the rate has decreased more than 800 pips in the early morning, but has failed to touch the first warning line (WL1), I’ve drawn a sliding line right above the Wl1, which will represent the major dynamic support. Most likely the rate will come to test and retest the broken lower median line (LML) of the descending pitchfork in the coming days, remains to see how will react after the US data will be released, a disappointment could help the price to reach the LML today, but we’ll have to be patient to see what will happen. The perspective will remain bearish if the price will stabilize below the LML, only a jump above this level could signal a short term rebound.

The rate has come back to test the lower median line (LML), but has closed below this obstacle, signaling that he could drop again, the price could approach the third warning line (wl3) if the US data will come in line with expectations or better.

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