- US dollar strength, Brexit concerns and risk-aversion to keep the pound heavy.
- Upbeat US GDP figure to send the Cable towards the 1.2750 levels.
The GBP/USD pair has picked up a bid in the European session, but remains confined within the familiar range, as the bears continue to test bulls” commitment just ahead of the 1.28 handle amid ongoing Brexit uncertainty and meltdown in the global stocks.
The bulls are seen trying hard making the recovery attempts, but a broadly firmer US dollar and risk-off slide in the European equities keep sentiment around the higher-yielding GBP undermined. Meanwhile, the Brexit impasse will continue denting the investors’ sentiment.
On Thursday, the Cable eroded 100-pips rapidly and fell to seven-week lows of 1.2798 following the reports that the Brexit talks are put on hold as the UK PM Theresa May’s Team doesn’t seem to agree on a way forward. This combined with the comments from the UK Brexit Secretary Raab and a broad-based US dollar comeback added to the sell-off in the spot.
Looking ahead, in absence of fresh UK macro news, the traders continue to pay close attention to the Brexit-related headlines, as they gear up for the critical US Q3 advance GDP figures due later today at 1230 GMT.
GBP/USD Technical levels
FXStreet’s Analyst Haresh Menghani, notes: “”¦the ongoing depreciating move is more likely to get extended towards the 1.2700 handle before the pair eventually drops to test YTD lows, around the 1.2665-60 region. A follow-through selling will set the stage for a convincing break through the 1.2600 handle and additional near-term weakness towards the key 1.2500 psychological mark. On the flip side, attempted recovery moves might now confront immediate resistance near mid-1.2800s, above which a bout of short-covering could lift the pair back above the 1.2900 handle towards retesting the 1.2920-30 supply zone.”
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