GBP/USD Analysis: Faces rejection at downward sloping trend-channel resistance
|On Thursday, the GBP/USD pair failed to sustain early strength beyond the 1.3200 handle and came under some intense selling pressure amid resurgent US Dollar demand, supported by a goodish pickup in the US Treasury bond yields. This coupled with the post-ECB weakness in the shared currency provided an additional boost to the greenback and further contributed to the pair's rejection slide from the vicinity of a short-term descending trend-channel formation on the daily chart.
Meanwhile, Thursday's disappointing US macro releases did little to hinder the USD rebound and stall the pair's sharp slide to the 1.3100 neighborhood. The pair surrendered all of its weekly gains and was now seen consolidating overnight losses as market participant now look forward to the advance US Q2 GDP growth figures. There isn't any market-moving economic data due for release from the UK and hence, the USD price dynamics might turn out to be an exclusive driver of the pair's momentum on the last trading day of the week.
From a technical perspective, weakness below the 1.3100 handle could get extended towards weekly lows support near the 1.3070 region. A follow-through weakness might prompt some additional technical selling and turn the pair vulnerable to accelerate the fall further towards challenging the key 1.3000 psychological mark.
On the flip side, any meaningful up-move now seems to confront fresh supply near the 1.3140-45 zone, above which the pair is likely to make a fresh attempt towards conquering the 1.3200 handle. Any subsequent up-move might continue to be capped at a short-term descending trend-channel resistance, currently near the 1.3225-30 region, as investors might now start positioning for the much anticipated BoE monetary policy decision next week.
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