GBPUSD Analysis: Sterling Drops Further Despite Hammond’s End of Austerity Speech

Sterling continues the bearish trend today despite yesterday’s Philip Hammond’s ‘end of the era of austerity’ budget speech.

October 2018 | AtoZMarkets UK’s finance chancellor, Philip Hammond declared an end to the era of austerity in yesterday’s last budget speech before Brexit. In a speech which last for more than 70 minutes, Mr Hammond announced a slight increase in growth forecasts, from 1.3% to 1.6% for 2019 and a better-than-expected borrowing figures. Prior to the event, he warned that there might be a need for an emergency budget if Britain leaves the EU in March without a deal. Meanwhile, the office of the Prime Minister has put down the idea of emergency budget irrespective of Brexit.

GBPUSD has refused to be lifted despite the budget speech. Price which went a bit above 1.28 yesterday has returned below it, dropping below 1.2785 September low, eyeing 1.266- August low.

GBPUSD Elliott Wave Analysis and Important Price Levels

In the last update, prior to the budget speech, we had a bearish scenario heading to 1.266 support. The chart below shows the new update.

The bearish impulse wave started early this month at 1.326, breaking below 1.292 and 1.2785 previous multi-week lows. The next level downside is 1.266 where the impulse wave pattern might rest, consolidate and push downside, or push for a bullish correction. Price is at the 5th wave of this impulse wave pattern as the chart above shows. The trend is downside but might be limited at 1.266.

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