GBP/USD battles 1.3200 amid cautious optimism, Jackson Hole eyed
|- GBP/USD keeps recovery moves from 1.3193 to trim intraday losses.
- EU envoys remove Brexit from agenda, UK services firms report heavy job cuts.
- Tory government readies another help to combat the virus and dampen OECD remarks.
- Markets await US GDP, Fed Chair Powell’s speech for fresh impetus.
Despite recovering from 1.3193, GBP/USD struggles to keep 1.3200, currently around 1.3209, while heading into the London open on Thursday. In doing so, the Cable tracks the global markets’ pause ahead of the key speech from the Jackson Hole Symposium, Wyoming.
Other than the traders’ mood, a report from the Confederation of British Industry (CBI) and comments by the Organisation for Economic Co-operation and Development (OECD) also weigh on the pair. CBI said, during its Thursday's release, “Companies reliant on spending by consumers - many of which only reopened in recent weeks after the lockdown - cut jobs at the fastest pace on record.” On the other hand, the OECD marked the British economy’s record quarterly slump as worrisome.
Furthermore, news that the EU envoys have dropped the negotiations over Britain and the European Union’s post-Brexit relationship as a subject for the next week’s meeting also weigh on the quote.
Elsewhere, fresh challenges to the US-China relations adds burden onto the market sentiment. The Trump administration prepares to sanction companies helping China to mark its existence in the South China Sea after the dragon nation fired missiles in the drills around the debatable region. Further, US Secretary of State Michael Pompeo slammed Beijing for "coercive bullying tactics against our friends in the United Kingdom".
Amid all these catalysts, the US dollar index (DXY) snaps the two-day losing streak while taking rounds to 92.90. However, traders are still worried as the second version of the Q2 GDP is likely to keep the economic pessimism on the chart while the Fed Chair could disappoint the markets if conveying the dovish bias.
Technical analysis
Considering the overbought RSI conditions on the four-hour chart and the pair’s multiple failures to stays past-1.3200, the August 06 high of 1.3185 acts as immediate support ahead of Tuesday’s peak near 1.3170. Though, the pair’s extended weakness past-1.3170 will be challenged by 50% and 61.8% Fibonacci retracement levels around 1.3120 and 1.3090 respectively. Alternatively, buyers will wait for a clear break of the short-term resistance line, currently around 1.3235, before taking entries to target the monthly top near 1.3270.
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