Technical Analysis:
Trend Identification: If GBP/USD has been in a downtrend or showing signs of weakening, traders might predict further declines.
Support and Resistance Levels: If the price is approaching a key resistance level and struggling to break through, there could be a short-term reversal, leading to a bearish move.
Indicators: Indicators like the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD) might suggest that the pair is overbought or is showing bearish divergence, prompting a 100-pip decline.
Fundamental Analysis:
Economic Data: Weak economic data from the UK (e.g., lower GDP growth, poor employment numbers) could weaken the GBP against the USD.
Interest Rates and Monetary Policy: If the Bank of England signals that interest rates might not rise, or the Federal Reserve continues with a hawkish stance, this could push GBP/USD lower.
Geopolitical Events: Political instability in the UK or global market risk-off sentiment can also drive the pound lower.
Market Sentiment:
Risk Appetite: In times of heightened global uncertainty, the USD often strengthens as a "safe haven," which could cause GBP/USD to drop.
Positioning: If traders are heavily long on GBP/USD, a shift in sentiment or a change in the fundamental backdrop could trigger a correction of 100 pips or more.
Trend Identification: If GBP/USD has been in a downtrend or showing signs of weakening, traders might predict further declines.
Support and Resistance Levels: If the price is approaching a key resistance level and struggling to break through, there could be a short-term reversal, leading to a bearish move.
Indicators: Indicators like the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD) might suggest that the pair is overbought or is showing bearish divergence, prompting a 100-pip decline.
Fundamental Analysis:
Economic Data: Weak economic data from the UK (e.g., lower GDP growth, poor employment numbers) could weaken the GBP against the USD.
Interest Rates and Monetary Policy: If the Bank of England signals that interest rates might not rise, or the Federal Reserve continues with a hawkish stance, this could push GBP/USD lower.
Geopolitical Events: Political instability in the UK or global market risk-off sentiment can also drive the pound lower.
Market Sentiment:
Risk Appetite: In times of heightened global uncertainty, the USD often strengthens as a "safe haven," which could cause GBP/USD to drop.
Positioning: If traders are heavily long on GBP/USD, a shift in sentiment or a change in the fundamental backdrop could trigger a correction of 100 pips or more.
Trade closed: target reached
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.