GBP/USD analysis: tough Brexit, dollar strength put the pair under selling pressure
|GBP/USD Current price: 1.3276
- EUR's weakness, increased chances of a hard-Brexit, weighed on the Pound.
- BOE's monetary policy meeting likely to add pressure on the Sterling.
The Pound collapsed alongside with the common currency these last few days, as investors rushed back to buy the greenback, resulting in the GBP/USD pair falling to 1.3210, just a couple of pips away from the yearly low of 1.3203 set at the end of May. UK PM May victory in the Commons House this week for sure signals a recovery of her leadership, but also points for a hard Brexit, denting demand for Sterling. Inflation in the UK remained steady at 2.1% in May, which means that the BOE that will have its monetary policy meeting next Thursday, will probably maintain the status quo, leaving rates unchanged and with no rate hikes in the foreseeable future, which may result in further Pound weakness. From a technical point of view, the downside is favored as in the daily chart, the pair settled below a now bearish 20 DMA at 1.3345, while the RSI hovers near oversold reading. The Momentum indicator, however, remains flat around its 100 level, as the pair held above the bottom of its previous 3-week range. In the 4 hours chart, the bearish potential is stronger, as the pair ended well below bearish moving averages, while technical indicators resumed their declines after the recovery of oversold readings stalled short of their midlines.
Support levels: 1.3250 1.3210 1.3170
Resistance levels: 1.3300 1.3345 1.3390
View Live Chart for the GBP/USD
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