- Bears to remain in control amid hawkish Fed and Brexit jitters.
- Technical set up point to further downside bias, as focus shifts to US data, Powell’s speech.
The GBP/USD pair is seen making minor recovery attempts from just ahead of the 1.31 handle, as the US dollar bulls take a breather following the hawkish FOMC statement.
US data, Powell’s speech – Up next
The post-FOMC upsurge in the US dollar appears to have lost steam, as Treasury yields continue to head south amid moderate risk-aversion, reflected by the negative sentiment seen around the European equities on Italian budget woes. The USD index retreated from 94.64 and now consolidates around the 94.50 levels, still up +0.33% on the day.
On the GBP-side of the story, Brexit-related headlines will continue to play a spoilsport to any recovery staged by the pound, as the UK’s Labor party leader Corbyn seeks to warn the EU’s Chief Brexit Negotiator Barnier to avoid a no deal Brexit when he visits Brussels later today.
In the day ahead, the Cable remains exposed to further downside risks and could test the 1.3050 support area, as the US dollar could pick up a fresh bid on upbeat US final GDP and durable goods data.
GBP/USD Technical Levels
Slobodan Drvenica at Windsor Brokers, noted: “Near-term structure weakened after recovery of last Friday’s strong fall stalled at 1.3217 on Wednesday, and subsequent fall risks extension towards key support at 1.3054 (daily cloud top / Fibo 38.2% of 1.2661/1.3297 / 21 Sep trough). Firm break here would generate bearish signal for deeper correction of 1.2661/1.3297 ascend. Weakening momentum studies on daily chart support scenario. Res: 1.3145; 1.3180; 1.3217; 1.3276 Sup: 1.3107; 1.3094; 1.3054; 1.3000.”
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