- GBP/USD extends gains as the US Dollar tumbles across the board.
- Cable head for best day in months but still down over the week.
The GBP/USD pair rose further during the American session on the back of a decline of the US Dollar and amid an improvement of risk appetite. It printed a fresh 2-day high at 1.3206 and it was hovering slightly below 1.3200.
Cable si rising more than a hundred pips on Friday. It received support from UK data: Q1 GDP rose above expectation. Later during the day, the slide of the US dollar boosted the pair further. The US Dollar Index, dropped toward 94.00 retreating further after hitting yesterday 1-year intraday highs.
Technical Outlook
The correction of the greenback and the sharp rebound of the GBP/USD from near the 1.3100 area could point to an extension of the recovery. But the bearish tone is likely to persist. “GBP/USD is set to be capped between 1.3100 and 1.3480 representing 50% and 38.2% Fibonacci retracement of the post-Brexit slump”, wrote FXStreet’s European Chief Analyst, Mario Blascak.
While the short-term outlook could favor some consolidation of a recovery for the next sessions, the main trend still points to the downside. Blascak warns that if GBP/USD breaks below the psychological 1.3000 level, it would open the way for 1.2770.
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