Pound Sterling Price News and Forecast: GBP/USD bears will get more aggressive below 1.2500

GBP/USD Forecast: Seems vulnerable to test 100-DMA, around 1.2425 region

The GBP/USD pair extended the previous day's rejection slide from the 1.2665-70 supply zone and witnessed some follow-through selling for the second consecutive session on Tuesday. The pair dropped back closer to the key 1.2500 psychological mark during the early European session and was pressured by a combination of factors. The US dollar drove some haven flows amid concerns about a further deterioration in the diplomatic relations between the world's two largest economies.

The US State Department on Monday rejected China's territorial claims in the South China Sea. Beijing was quick to respond and claimed that the US was trying to inflame tensions in the disputed waters. This comes on the back of the ever-increasing coronavirus cases in the US, which led to fresh restrictions in California. The developments overshadowed the latest optimism over treatment for the highly contagious disease and took its toll on the global risk sentiment. Read More...

 

GBP/USD: Bears will get more aggressive below 1.2500

Overview:- From starting of this week pair is heading south side as we can see pair is facing supply pressure from strong key resistance level. Well the way pair returned from 1.2668 level it seems like pair is heading south side and the 1.2500 level is last hope for bulls. If pair able to break this level then we may see strong sell off and the 1.2400 and 1.2250 level is not far away. Also, if bears continue the game and hold grip in their hand then below 1.2250 level second phase of bearish storm will start, let's see whether bears will break it or not but presently pair seems weak and the 1.2400 and 1.2250 are the next arrival of bears below the 1.2500 level.

Today pair arrived at 1.2504 level So here we would suggest our traders that go for sell on every bounce. Momentum is favoring the bears now and it seems like pair has formed a top of 1.2812 from intermediate point of view and other indicators and oscillators are also supporting the bears. Read More...

 

Sterling in the cross-hairs today

UK data today has continued the pressure on Sterling, with the UK economy rebounding less than expected in May. Overall GDP lifted 1.8% m/m, compared to Bloomberg consensus of 5.5% m/m. With economic activity still falling -20.3% m/m in April, the modest uptick over the month still saw the annual rate falling back to -19.1%, from -10.8% y/y in the previous month. Industrial production actually lifted 6.0% m/m and construction output rebounded 8.2% m/m, but rebounds fell short of expectations and this also holds for the index of services, which lifted a mere 0.9% m/m, after still falling -18.9% m/m in April. Services are still down nearly 19% on last year’s levels, construction output is nearly 40% below the levels in May last year and overall industrial production 20%. Virus restrictions came later and subsequently were also lifted later in the UK compared to most other European countries, and forward looking confidence data are signalling that at least the construction sector is back in expansion territory. Still, the numbers highlight downside risks, especially as there is also not much progress in trade talks with the EU, leaving the risk that the transition period will end without a new deal in place.

The Office for Budget Responsibility (OBR) also issued their latest updates today and it makes sorry reading for the UK economy, with expectations of record peacetime levels of public debt and the largest decline in UK GDP in 300 years. Read More...