The pound was one of the weaker currencies in recent weeks and when the opportunity comes, it falls over. This opportunity is the stronger dollar. The wind is now sailing in favor of the greenback. For the euro, this means a swing lower within the range. For the pound, it means dropping to lower ground.
It is not the data: CBI Industrial Order Expectations came out at 13 points, above 8 expected and 10 seen last time. Yet this is not the only the data point that matters.
The pound is suffering from slower growth, a reluctant BOE and high uncertainty about Brexit. While the British government is working hard to produce proposals, these seem to fall on deaf EU ears.
It could not take advantage of a falling dollar and suffers when the USD swings to the other side.
More: GBP/USD showing weakness – Elliott Wave Analysis
Cable is trading at 1.2811, a pip lower than the lows seen on July 12th and at the lowest since June 28th. If the pair continues lower, the next level to watch is 1.2770, 1.2710 and more importantly, 1.26. The pair bounced from 1.26 before reaching the peak at 1.3270.
Here is how things look on the daily pound/dollar graph:
