GBP/USD & UK Downgrade: Still more room for bears?
During yesterday, Fitch and S&P agencies downgrade their respective ratings regarding UK's economy. Fitch cut from “AA+” to “AA”, while S&P put the outlook on “AA” from “AAA”, and the effect was felt in the markets, specially with GBP/USD, which currently is trading on historical lows below the 1.3300 barrier. Also, the uncertainty remains in place, as recently the UK Health Secretary said that a 2nd referendum could happen.
Our technical overview is still calling for more downside on the Cable, because it can replicate the cycle that drove the pair during the Brexit referendum's results and Fibonacci expansion is showing a key area of interest: 1.2869 and 1.2567 levels, which are 61.8% and 78.6% respectively. 50 and 200 SMA at H1 chart are also pointing to the downside, but be cautious when trading the GBP/USD nowadays, as the swings are still big.