Sterling increasingly pressured towards new long-term lows

August 12, 2016

The Bank of England’s interest rate cut to a new record low of 0.25%, and other stimulus measures implemented by the UK central bank last week in response to June’s Brexit decision, prompted even more pressure on sterling than had already plagued the struggling currency.

After last week’s rate cut, the British pound fell swiftly against its chief rivals – the US dollar, euro, and yen – prompting the pound to re-approach its recent long-term lows against these other major currencies.

As of this writing, GBP/USD has dropped below the key 1.3000 psychological level, which has opened the way for a further potential fall towards July’s post-Brexit 31-year low of 1.2795. Similarly, sterling has continued to fall precipitously against the euro, as EUR/GBP rose further on Thursday to re-test July’s multi-year high of 0.8626.

Even more so than GBP/USD and EUR/GBP, however, the currency pair that has arguably been affected most severely in the post-Brexit environment has been GBP/JPY. From the exceptionally sharp Brexit-driven dive in late-June to the current slide since late-July, GBP/JPY has mostly shown a singular bearish bias that has been even stronger than many have anticipated. This has been due both to tremendous pressure on the pound as well as a consistently strong Japanese yen that was helped along initially by its status as a safe-haven currency during post-Brexit volatility.

GBP/JPY now appears likely to continue its robust downtrend that has been in place for more than a year. The currency pair has currently extended its recent slide to approach major support around the psychologically-significant 130.00 level, which is in the vicinity of July’s multi-year lows. A strong breakdown below 130.00 would result in a further extension of the year-long downtrend, with the next major downside target around the key 125.00 support level.

Publication source
FOREX.com information  FOREX.com reviews

September 30, 2016
Gold earns slightly in Asia
On Friday, gold prices edged up in Asia after a key manufacturing poll from China came in as expected and traders looked ahead to more remarks from Fed policymakers...
September 30, 2016
Rally on stock markets didn't last long
Wall Street closed with losses and in Asia, lenders were also under pressure, with Nikkei and Hang Seng down more than 1.4% and only mainland Chinese markets managing to carve out gains...
September 30, 2016
Commodity currencies closed weaker
Following the OPEC led gains in the oil markets which saw the commodity linked currencies gaining ground, price action yesterday saw the currencies give up most of the gains as the US dollar edged higher on the day. The Australian dollar was the weakest, closing the day 0.73% lower...

FXCM Rating
Grand Capital Rating
OctaFX Rating
FxPro Rating
Larson&Holz IT Ltd Rating
FIBO Group Rating

OptionsXO Rating
Porter Finance Rating
EZTrader Rating
TopOption Rating
Empire Option Rating
IQ Option Rating