Key Points
- The British Pound continued to move down against the US Dollar and may continue to weaken.
- There is a triangle pattern formed on the hourly chart of the GBPUSD pair, acting as a catalyst for a downside move.
- In the UK today, the Rightmove House Price Index was released, which hardly made an impact.
- There was a decline of 1.2% in the Rightmove House Price Index in August 2016.
Technical Analysis
The British Pound continued its decline this week against the US Dollar, and traded as low as 1.2904. The GBPUSD pair is currently in a downtrend and following a triangle pattern formed on the hourly chart.
The pair is also below the 21 hourly simple moving average, which is acting as a resistance and pushing the pair down.
Selling rallies can be considered as long as the pair is below the 21 hourly SMA. On the downside, the recent low of 1.2900 is a support to watch.
UK Rightmove House Price Index
Earlier today, the UK saw the release of the Rightmove House Price Index. It highlights the strength of the UK housing market and can be considered as the economy as a whole due to property prices’ sensitivity to changes in the business cycle.
The outcome was not as the market expected, as there was a decline of 1.2% in August 2016, compared with July 2016. In terms of the yearly change, there was an increase of 4.1%, which was on the lower side when compared the last rise of 4.5%. The report added that “With July buyer enquiries to agents 18% down on election-boosted 2015 though up 4% on 2014, the outcome of the second half of 2016 hangs on the strength of the traditional autumn market rebound”.
Overall, the GBPUSD pair remains in a downtrend, and may continue to head lower in the short term.
