- In bearish consolidation as the greenback takes a breather ahead of Jackson Hole Symposium.
- No-Brexit deal induced jitters to cap any recovery attempts in the pound, as US dollar to benefit from escalating US-China trade tensions.
The GBP/USD pair tested bids once again at the 1.28 handle and managed to cling onto the last, now extending its downside consolidative, as we progress towards the European opening bells.
The recovery attempts in Cable are mainly driven by a minor correction seen in the US dollar versus its main peers, as the US-China trade talks end with no major breakthrough while markets resort to take profits off the table following the two-day US dollar rebound, as the focus shifts to the US durable goods data and Fed Chair Powell’s speech at the Kansas city Symposium.
On Thursday, the major faced a double whammy from the no-Brexit deal-related jitters on one hand while broad US dollar strength amid escalating US-China trade tensions weighed on the other hand.
The GBP took a hit after the UK’s Brexit Secretary Dominic Raab released 25 so-called “technical notices” that covered everything from financial services to nuclear materials, advising companies and the public on how to prepare for such a no-Brexit deal scenario, suggesting markets that a no-deal outcome could be very well on the cards.
Later today, apart from the US macro news and Powell’s speech, the speech by the Bank of England (BOE) Chief Economist Haldane at the Symposium will be also closely eyed for fresh insights on the central bank’s interest rate outlook.
GBP/USD Technical Levels
FXStreet’s Chief Analyst, Valeria Bednarik, notes: “The 4 hours chart for the GBP/USD pair indicates that the ongoing decline could continue during the next couple of sessions, as the pair fell below its 20 SMA, while technical indicators entered negative territory with sharp downward slopes, the Momentum currently in neutral territory and the RSI at 45. Chances to the downside will increase on a break below the 1.2800 figure. Support levels: 1.2800 1.2765 1.2730. Resistance levels: 1.2850 1.2900 1.2935.”
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