The GBPUSD is currently finding itself in a very strong downtrend whose development we have followed over the last couple of months. Part of the reason for the strengthening of the U.S. dollar has to do with the fact that the market has already priced in FED's inflationary policy.
The greenback is also likely to be bolstered this week with the beginning of the new earnings season in the U.S. That is so because a generally robust quarterly performance would boost global demand for U.S. stocks, which can be purchased in dollars.
Meanwhile, the sterling continues to reel from the worsening pandemic situation in the UK. The new delta variant of coronavirus could jeopardise the highly anticipated reopening of the country, which is exerting heavy pressure on the sterling.
Thus, the GBPUSD is likely to continue depreciating over the medium term. However, the pair could be due for a minor pullback following the massive slump recently. This can be utilised by bulls and bears alike.
As can be seen on the daily chart below, the new downtrend emerged following the completion of the massive Double Top. This signifies a very probable continuation of the downtrend's development over the next weeks.
|Short Term||Long Term||Net % Gains|
|Net % Gains|
Disclaimer: Your capital is at risk! Trading and investing on the financial markets carries a significant risk of loss. Each material, shown on this website, is provided for educational purposes only. A perfect, 100% accurate method of analysis does not exist. If you make a decision to trade or invest, based on the information from this website, you will be doing it at your own risk. Under no circumstances is Trendsharks responsible for any capital losses or damages you might suffer, while using the company’s products and services. For more information read our Terms & Conditions and Risk Disclaimer.