January 20, 2009
GBP/USD Dives Below 1.40 - Loses 1000 Points In Less Than 24 Hours
Well I predicted a fall to 1.40 a month or two ago, but to be honest I thought we were starting to find a base at around the 1.45 level. Clearly not though because the poor old GBP/USD has absolutely plummeted in the last day or so going from around 1.50 to 1.40 in no time at all.
There was a lovely EMA crossover at the start of this move, which I managed to take a decent profit from (more details to come in my weekly trading update) but unfortunately it's now a whopping 800 points in profit.
So how much further can we fall?
Well I think I made a prediction in my last analysis of the GBP/USD that we could hit 1.30 and that doesn't look unrealistic now. A combination of the dismal UK economy and the feel-good factor of Barack Obama coming into power indicates a weakening £ and a strengthening $, which of course suggests that the GBP/USD could easily fall further.