GBP/USD analysis: dollar's sell-off saved Pound, for now

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3130

Brexit woes and poor data that dent chances of an August hike undermined the Sterling.
Pound still among the weakest currencies, little room for advances on self-strength.

Dollar's weakness rescued the Pound, as the GBP/USD pair continued recovering ground from the yearly low of 1.2957 achieved last week. The pair settled at 1.3130, ending the week anyway in the red, as easing inflation and poor retail sales dented chances of an August rate hike in the UK. The Sterling was already under pressure amid Brexit woes, as the so-long awaited government plan was a major disappointment for Brexiteers, and resulted in several of May's ministers quitting. Despite the recovery, the GBP remains among the weakest currencies, lacking strength of its own, and any future advance will depend mostly on dollar's weakness, while negative headlines from the UK will likely exacerbate shorts. The daily chart indicates that bears are still in control of the pair, as the latest recovery stalled below its 20 DMA, while technical indicators have managed to recover some ground, but remain in negative territory. In the 4 hours chart, the pair settled above a sharply bearish 20 SMA, still some 150 pips below the 200 EMA, while technical indicators stand well above their midlines, but lost their upward strength. The pair could continue advancing on a break above 1.3155, the immediate resistance, although the first line of sellers should appear around the 1.3200 figure. Renewed selling pressure below the 1.3100 level, on the other hand, will likely favor additional declines for this Monday, toward the key 1.3000 psychological threshold.

Support levels: 1.3100 1.3065 1.3030

Resistance levels: 1.3155 1.3195 1.3240

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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