Though EUR/USD hit a new 20-year low at a price of just around 103, the US dollar DXY reached a new 20-year high. The USD index is rising steadily as a result of a confluence of US Dollar strength and Euro depreciation.
In its most recent Financial Stability Report, the Bank of England (BoE) warns that the UK economy’s prospects are extremely unpredictable and that global financial circumstances have gotten harsher. According to the central bank, individuals and companies will be more strained for months ahead as a result of increased prices, slower growth, and stringent financing circumstances.
While trading at about 1.2030, the cable is aiming for a dip below -1.2000. Notwithstanding continued political issues in the UK, the British pound is not weak, but the US dollar is not holding back versus other currencies by contrast. The following two support levels for GBP/USD are 1.1976 and 1.1934. 1.1800 may be tested again if these are decisively broken.
A total of 75.43% of traders are net-long, whereas, in comparison to July 4 and the previous week, the net-long percentage is up 3.59% and 12.51%, respectively. On another note, the number of net-short traders within the same time frame is higher by 0.30% but lower than the week before by 14.95%.
The fact that traders are net-long signals that the price of GBP/USD may keep declining.