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  • GBP/USD finds support at 1.2660, the new YTD low.
  • DXY retreats modestly after approaching 97.00, the US dollar remains among the top performers on the back of risk aversion.

The GBP/USD pair trimmed losses during the last hours but still remains under pressure amid a stronger US dollar across the board. It bottomed at 1.2660, the lowest since June 22, 2017, and then bounced to the upside, trimming losses. Recently reached 1.2706 but so far it failed to hold on top of 1.2700. As of writing, was trading at 1.2695, off lows but still on its way to the lowest close in a year.

Cable’s slide today was triggered by a rally of the US dollar, amid risk aversion and also following US economic data. The July retail sales report came above expectations offering more support to the greenback. Despite the numbers, the main driver of today’s price action was risk aversion.

Equity markets were sharply lower including Wall Street. The Dow Jones was falling around 1.0% and the decline among emerging markets was bigger. Concerns about the impact of trade tensions and of the sell-off in emerging markets affected financial markets.

GBP/USD Technical levels

The main trend in GBP/USD was still pointing to the downside, despite extreme oversold readings in some technical indicators. So far the decline was capped by the 1.2660 area, the immediate support. Below the next support levels were seen at 1.2630 and 1.2610. To the upside, a consolidation above 1.2720 could remove some of the bearish short-term pressure and on top, resistance levels were seen at 1.2790 and 1.2825/30 (weekly high).