GBP/USD declines towards new 2014 low

<p>GBP/USD (daily chart shown below) declined sharply after Wednesday’s Bank of England quarterly inflation report, and is once again closely approaching the new 2014-low of […]</p>

GBP/USD (daily chart shown below) declined sharply after Wednesday’s Bank of England quarterly inflation report, and is once again closely approaching the new 2014-low of 1.5788 that was established just late last week.

GBP/USD has clearly been entrenched in a steep bearish trend for the past four months, since the multi-year high of 1.7190 was reached in mid-July.

This bearish trend has been outlined by both a well-defined downtrend line as well as the 50-day moving average. Late October saw an attempt at an upside breach of both this trend line and moving average, but price action quickly retreated to establish new lows.

2014-11-12-GBPUSD

Currently, the currency pair is trading just slightly above last week’s noted year-to-date low, and continues to trade under pressure with a strongly bearish directional bias.

The next major support target immediately to the downside resides around the 1.5750 level, which is also near the 61.8% Fibonacci retracement level of the year-long uptrend from July of 2013 to July of 2014.

Any significant breakdown below 1.5750 would confirm a continuation of the entrenched downtrend, with further downside targets residing around 1.5600 and then 1.5400.

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