GBP/USD has significant room to fall as Boris fails to boost sterling

GBP/USD has been retreating from the highs amid fear-led dollar strength. UK Prime Minister Boris Johnson's keynote speech is unlikely to boost the pound, leaving plenty of room for a substantial drop, according to FXStreet’s Analyst Yohay Elam.

Boris and technicals are no match for King Dollar

“UK PM Johnson is set to give his keynote speech at the Conservative Party conference later in the day and paint a rosy picture of post-Brexit Britain. He wants the country to get used to living without significant EU migration in the long run. In the short run, that means managing without much-needed lorry drivers to bring fuel to petrol stations. That crisis is still going on.”

“Investors will be watching the ADP labor figures, with expectations standing at 425,000 for September, higher than 374,000 in August. That could also give another boost to the dollar – especially as last month's ADP figures were better correlated with the official Nonfarm Payrolls report.” 

“GBP/USD has slipped back below the 50 Simple Moving Average (SMA) and remains below the 100 and 200 SMAs. Meanwhile, the Relative Strength Index (RSI) is outside oversold conditions, thus allowing for more falls.”

“Support awaits at 1.3525, a support line from early in the week. It is followed by 1.3435, a stepping stone from the previous week, and then by the 2021 trough of 1.34.”

“Resistance is at 1.3590, a cushion from earlier this week, followed by the weekly high of 1.3650.”