Pound remains in red ahead of appointment of Britain’s new prime minister
Cable hits new 29-month low on Monday, in extension of bearish acceleration in past three weeks, a part of larger downtrend.
The pound remains under strong pressure on risk aversion, driven by growing economic and geopolitical tensions that continues to lift dollar.
Today’s top event will be appointment of the UK’s new prime minister, with wide expectations that Liz Truss, current foreign minister and front runner to replace Boris Johnson, will be named as Britain’s next PM.
If appointed, Truss will face a number of huge obstacles, as the country has been in a series of crisis since 2015 when Conservatives came on power.
Truss will face a fight with skyrocketing inflation, which reached a double-digit values, soaring cost of living, industrial sector crisis and recession that altogether darken the outlook.
The sentiment remains firmly negative in such conditions, while bearish technical studies on all larger timeframes (daily / weekly / monthly) add to negative outlook.
Bears eye 2020 low (1.1410) violation of which would risk further fall and unmask lows of 1985.
Meanwhile, near-term action may see some price adjustment as daily studies are oversold.
Upticks should offer better selling opportunities while the price action stays below falling 10DMA (1.1670).
Res: 1.1569; 1.1634; 1.1703; 1.1760
Sup: 1.1430; 1.1410; 1.1352; 1.1227