FxWirePro: Sell pound targeting 1.24 against dollar

The pound is in decline as the economic numbers continue to disappoint to the down side. The rate of UK home price growth cooled for the third consecutive month in June. While the price is up 4.9 percent from a year ago, the price is down 5 percent compared to May. Reports suggest that the demand for housing has taken a hit as rising inflation has sapped consumers’ spending ability this year, and as uncertain negotiations on Britain’s divorce from the EU has hit consumer confidence.

In addition to that, inflation has also slowed down in recent months cooling speculations that the central bank would have to reverse course rapidly and raise rates. In the latest interest rate decision, only two policy makers called for a hike of 25 basis points, down from three in the previous meeting.

While weaker dollar could push the pair higher, and the bulls are yet to give up, a downside dive by the pound looks more likely as of now. The chart shows the pound has been struggling to break a key down trend line that he been in place since July 2014. The pound has been trying to break the line for the past three days and a downward slide now looks more likely.

We at FxWirePro would like to recommend selling the pound at the current price of 1.291 against the dollar and at rallies with a target of 1.24 and with a stop loss around 1.32 against the dollar.