GBP/USD analysis: bears tested the key 1.3000 support

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3063

UK inflation remained steady at 2.4% in June, reducing chances of an August rate hike.
UK Retail Sales expected to have advanced modestly in June.

The GBP/USD pair fell to a new 2018 low of 1.3009, as broad dollar's strength coupled with steady UK inflation, which reduces chances of an interest rate hike in August. According to the official release, yearly inflation remained unchanged at 2.4% in June, with the core reading shrinking to 1.9% from the previous 2.1%, also below the expected 2.2%. The Retail Sales price index was up 0.3%, below the previous and the expected 0.4%. The UK will release June Retail Sales this Thursday, seen up 0.4% in the month, while the core reading is expected to post a modest 0.3% advance MoM. An easing dollar helped the pair bounce from the mentioned low, now at around 1.3060. Despite there were no fresh Brexit-related headlines, the negative sentiment triggered by the political woes that shaken the kingdom these days, continue to undermine the Pound. The 4 hours chart for the pair shows that it's currently oversold, with the Momentum maintaining its bearish strength but the RSI aiming to recover ground at 32, anyway indicating that selling interest remains strong. The 20 SMA in the mentioned chart gains downward strength well above the current level, and below an also bearish 200 EMA, which also favor the downside. The 1.3000 level is a major psychological support and won't be easy to break, yet if it finally gives up, the pair could easily lose another 100 pips.

Support levels: 1.3035 1.3000 1.2970

Resistance levels: 1.3080 1.3120 1.3155

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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