GBP Hits Long-Term Support as Pound Loses Almost 500 Pips in Five Weeks

The British Pound (GBP) has been on a downward trend since August 21, losing nearly 500 pips and reaching its weakest level in late June. The pair is now trading around $1.3210-$1.3220, with the dollar's strength pushing sterling toward long-term support at $1.3180.

The rising channel points toward this key level, which connects the November 5 low at $1.3009 and the June 24 touchpoint around $1.3136. A daily close below $1.3150 would provide stronger evidence that sellers have broken the channel rather than briefly tested it.

The UK economy is sending mixed signals, with GDP expanding 0.4% in July but August government borrowing reaching £18.3 billion, exceeding forecasts and reducing the government's room for maneuver ahead of the October 28 budget.