GBP/USD Forecast: increasingly bearish, eyeing a retest of 1.2135
|The GBP/USD pair trades marginally lower within a tight range this Friday, barely holding above the 1.2200 level, after trading as high as 1.2332 earlier this week. With little macroeconomic data coming from the UK, neither fresh headlines over Brexit political woes, the Pound has been trading quietly over these last few days, falling on broad dollar's strength, with the dollar index surging to a fresh seven months high late Thursday. Hardly a market mover, the kingdom has just released the public sector finances figures for September 2016, showing that the sector's net borrowing in the month came in worse-than-expected, up to £10.118B from previous £8.200B.
Technically, the risk is towards the downside, with the pair trading a handful of pips above Thursday's low of 1.2209, the immediate support, and technical indicators in the 4 hours chart heading south within bearish territory, although with limited momentum. In the same chart, the price has broken below its 20 SMA that also lacks directional strength. A break below the mentioned support should lead to a continued decline towards the weekly low, at 1.2135.
The immediate resistance is the 1.2250/60 price zone, and a recovery beyond it can see the pair advancing up to 1.2300. Above this last, the next intraday resistance comes at 1.2335, a strong static level that has contained rallies for almost two weeks.
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