I received an email from Arun who wrote:
Mario, the GBPUSD dropped more than 200 pips over the past week. What caused that? Do you think the bearish run will end soon?
The downward momentum on the GBPUSD this past week is mainly due to the USD strengthening rather than the GBP weakening.
U.S. core retail sales, building permits, unemployment claims, manufacturing index and existing home sales all registered better than forecast figures. This contributed to the demand for the USD.
Also, generally less-than-stellar corporate earnings, released last week, dampened investors’ risk appetite and increased demand for the Dollar as well.
The GBPUSD may continue its downward momentum, but take note there is obvious support at the round number of 1.5900.
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