GBP/USD analysis: break of 1.2960 could unwind a steeper sell-off
GBP/USD Current Price: 1.2990
- The US will release this Friday Mach Housing Starts and Building Permits.
- The Pound came under heavy selling pressure despite upbeat local data, weighed by Brexit uncertainty.
The GBP/USD pair pierced the 1.3000 level for the first time in two weeks, amid renewed dollar's demand. UK data released at the beginning of the day surprised to the upside, as Retail Sales in the kingdom surged by 1.1% MoM, much better than the -0.3% forecasted. Yearly basis, sales were up by 6.7% vs. the market's forecast of 4.6%. Even further, February readings were upwardly revised, providing Sterling short-lived support, with speculative interest reluctant to add longs amid Brexit uncertainty. The dollar, on the other hand, got supported by better-than-expected local data which sent Wall Street up in the last active day of the week, and poor European figures sending investors into the more safe greenback. London and US markets will be closed Friday, although the US will publish March Housing Starts and Building Permits.
Trading at its lowest for this April, the GBP/USD pair is breaking below a daily ascendant trend line coming from March low at 1.2959, with the line currently at around 1.3000, offering an immediate short-term resistance. In the 4 hours chart, the 20 SMA accelerated its decline well above the current level, while the RSI indicator entered oversold territory, now aiming to recover some ground but at 28, as the Momentum remains within negative levels, all of which keeps the risk skewed to the downside. The pair may attempt to recover the 1.3000 level, yet if it fails, lower lows are likely in the following sessions.
Support levels: 1.2960 1.2920 1.2875
Resistance levels: 1.3000 1.3035 1.3060
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.
