GBP/USD Forecast: Bearish outlook intact, 1.3200 mark likely to cap any further up-move
|The GBP/USD pair regained positive traction on Tuesday and touched a one-week high level of 1.3160. Against the backdrop of some renewed US Dollar weakness, the British Pound got an additional boost after the UK PM Theresa May announced that she will personally lead the Brexit negotiations with the European Union.
Meanwhile, the deadline for exiting the European Union is now less than nine months away and with no workable plan in sight, concerns over a no-deal Brexit was now seen keeping a lid on any further up-move for the British Pound.
There isn't any major market-moving economic data due for releases on Wednesday and hence, the pair seems more likely to be influenced by any fresh Brexit headlines and the broader market sentiment surrounding the buck. Moving ahead, the upcoming US macro data - durable goods and advance Q2 GDP growth figures, might provide some short-term directional impetus ahead of next week's BoE monetary policy decision.
From a technical perspective, the ongoing recovery move seems nothing but a corrective bounce within a well-established bearish trend, as depicted by a descending trend-channel formation on the daily chart. Hence, any subsequent up-move beyond the current resistance area, marked by 50% Fibonacci retracement level of the 1.3363-1.2957 recent downfall, could get extended but is likely to be capped near the 1.3200 handle.
On the flip side, any meaningful retracement is likely to find support near the 1.3110-1.3100 region (38.2% Fibonacci retracement level), which if broken would reinforce the bearish bias and drag the pair towards 1.3050 support area. A follow-through selling has the potential to continue exerting downward pressure back towards the key 1.3000 psychological mark.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.