“¢ A goodish pickup in the USD demand kept a lid on any meaningful up-move.
“¢ Bulls seemed unimpressed by positive Brexit comments by Barnier and Raab.
The GBP/USD pair finally broke down of its consolidation trading range and dropped to a two-day low, around the 1.2965-60 region in the last hour.
The pair struggled to build on Wednesday’s strong upsurge, supported by news that the EU was willing to offer the UK an unprecedented partnership, and remained capped below four-week tops, set in the previous session, coinciding with 50-day SMA immediate hurdle near the 1.3030-40 region.
A goodish pickup in the US Dollar demand, triggered by escalating US-China trade tensions, was seen as one of the key factors prompting some long-unwinding trade on the last trading day of the week. According to some news reports, the US President Donald Trump was preparing to impose tariffs on additional $200 billion worth of Chinese imports, as early as next week, and resurfaced fears of a full-blown trade war between the world’s two largest economies.
Meanwhile, the latest leg of slide over the past hour or so coincided with the EU chief Brexit negotiator Michel Barnier and the UK Brexit Secretary Dominic Raab‘s joint Brexit press conference in Brussels. The comments were mostly positive and reflected optimism over reaching a Brexit deal, albeit did little to lift the British Pound.
Moving ahead, traders now look forward to the US economic docket, featuring the second-tier release of Chicago PMI and the revised UoM consumer sentiment, index in order to grab some short-term trading opportunities.
Technical outlook
Yohay Elam, FXStreet’s own Analyst writes, “1.3045 is the immediate cap after being the high point in recent days. 1.3080 is the next line to watch after it held the pair down in late July. 1.3175 was a swing line around that time. 1.3220 is next up.”
“1.2980 provided support to the GBP/USD after the recent surge. 1.2940 capped the pair twice in late August. 1.2840 was the low just before the leap,” he adds further.
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