Sterling falls to new multi-year low after disappointing data further soured the sentiment
Cable accelerates below 1.12 mark on Friday and hit new lowest since 1985, in extension of steep bear-leg from 1.1738 (Sep 13 lower top), which is a part of larger downtrend from 1.4249 (June 2021 peak.
The action in Asian and early European trading has registered a fall of 0.8%, as the pair is on track for a second straight significant weekly loss (over 2% so far).
Persisting safe haven flows on fears of escalation geopolitical situation, weakening economy and signals that the Fed will remain aggressive regarding its monetary policy, continue to deflate pound.
The latest economic data from UK, further weakened the sentiment as services PMI fell below 50 threshold in September (49.2 vs 50.9 in Aug) with Sep figure being the lowest since January 2021, while manufacturing sector performed better than expected in September (48.5 vs 47.3 f/c) but stays in the territory that points to contraction.
Weak fundamentals complement to bearish technical studies, signaling further weakness, with psychological 1.10 support being in focus, with risk of acceleration towards Feb 1985 low at 1.0520.
Meanwhile, bears may take a breather on oversold conditions on daily and weekly chart, with upticks to be capped under strong barrier at 1.1410 (falling 10DMA / Mar 2020 low) to offer better selling opportunities.
Res: 1.1273; 1.1305; 1.1364; 1.1410
Sup: 1.1150; 1.1100; 1.1072; 1.1000