This morning, UK economic data were released that was disappointing. The Office for National Statistics reports that the real gross national product (GDP) fell by 0.5% between July 2023 and August 2023. There were declines in a variety of sectors. This magnitude of decline was last seen in February this year.
The GBP/USD exchange rate fell sharply as a result. Gleichzeitig, the rate fell below the previous lowest set on 7 September. Bears have been putting pressure on 1.245. In June, this year we saw the last time that one pound of sterling was worth 1.2443 dollars.
The Bearish Argument
→ The UK has the highest inflation among Western countries. The Bank of England must keep interest rates high to reduce them and create the conditions for further GDP decline.
→ In case of a successful bearish breakdown of the level of 1.245, which provided support in September, this level may become resistance. This was also the case for the level of 1.255.
→ The GBP/USD rate has been in a downward trend since mid-July, as shown by the red channel. The median line is likely to put pressure on pound rates in the future.
→ After the first reaction, the rate was restored. It’s…