GBP/USD analysis: dollar resumes advance

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2810

UK budget presentation failed to motivate Pound's bulls.
Dollar stronger as risk-off returns in the US afternoon.

The GBP/USD pair spent most of this first day of the week holding above 1.2800 ending the day marginally lower in the 1.2800 price zone. The most relevant event of the day was UK's Chancellor Phillip Hammond presenting the kingdom's budget. Among his opening remarks, he said "the era of austerity is over," among other encouraging statements that clearly failed to motive Pound's bulls, more concerned these days about the effects of Brexit on the UK economy, and Hammond words over the weekend, claiming that a no-deal Brexit will need adjustment to this budget. Growth forecast was revised slightly higher and the expected deficit lower. Minor data from the UK showed that Consumer Credit in the UK rose by less-than-expected in September, up by £0.785B, while Mortgage Approvals in the same month were up by 65.269K, better than the 65.000K forecasted. On Tuesday, the UK will release the CBI Realized Trades Survey for October.

Meanwhile, the pair remains near the multi-month low of 1.2776 hit last week, and technically bearish according to intraday technical readings, as the pair is below a strongly bearish 20 SMA, which capped an early attempt to advance and is currently around 1.2840, while technical indicators turned south, the Momentum accelerating to fresh daily lows and the RSI currently at 28, in line with further slides ahead particularly on a break below 1.2775.

Support levels: 1.2775 1.2740 1.2700

Resistance levels:1.2850 1.2880 1.2925

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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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