The price of GBPUSD has rejected a key weekly trendline, could this see the price trade lower?
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The Bank of England said that the UK will be in a 2 year recession which has caused the GBP to weaken. This statement from the BoE was a surprise to investors and could prevent the UK public spending more in the economy. This combined with the rising inflation and the interest rate hikes we could expect the GBP to come under more pressure. The price of Cable has risen recently because of the softer USD. The USD Index briefly traded below the key 110.00 handle but has since recovered. This could put pressure on the USD if it continues to trade higher from here.
The weekly chart shows the price is in a strong downward trend. We can see a strong trendline resistance formed from the highs of this year. The price has retested the horizontal resistance and trendline resistance at 1.1600. The 4hr chart shows price forming a new low, if this continues and price forms a lower high we could expect the weekly to move into an impulsive phase. This could see the price move to the lows of 1.1150.
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