Monday, October 3, 2022

Last Minute: Pound is Preparing for Blackout!

The British Pound is losing ground, plus we are seeing a stronger dollar. Such a combination leads to an even deeper decline in the GBPUSD pair. In the case of the pound, the weakening is a result of plans the British government is making in January for a “blackout”. Worst case indicates that in the worst frost conditions, electricity and gas supply can be disrupted for up to 4 days, leading to rationing not only in the industry but also in households. Interestingly, more rate hikes are expected in the UK in the coming months, which does not bode well when coupled with industrial stagnation. It looks like a recession is coming in the UK (recent BoE forecasts indicate a slowdown in 5 quarters, starting in Q4).

In addition, the British faced a huge increase in their electricity bills. Bills are expected to rise from around £2,000 a year, which is paid now, to over £4,200 per year the following year.

Last Minute: Pound is Preparing for Blackout!

The pound is taking huge losses after the above information came out. Source: xStation5

Last Minute: Pound is Preparing for Blackout!GBPUSD is trading below its 50 period moving average on the H4 chart. This average often provided significant resistance and support. Source: xStation5

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Nation World News Desk
Nation World News Desk
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