GBP/USD analysis: May's Brexit strategy keeps capping the upside

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3266

UK data disappointed big, adding to concerns of the local economy.
UK politicians' resignations continue in protest against PM May´s softer Brexit strategy.

The GBP/USD pair extended its relief rally at the beginning of the day but was unable to hold on to gains, as UK data disappointed, while more politicians resigned in protest at PM May's softer-Brexit plan. UK Industrial Production fell 0.4% in May, against an expected 0.5%, while Manufacturing Production rose by just 0.4% vs. the 0.9% forecasted. The annual figures posted modest advances that fell short from market's expectations. The Goods Trade Balance posted a wider-than-expected deficit of £12.36B in the same month, while the GBP growth estimate, a new figure that will be released monthly basis from now on, showed that the economy grew by 0.3% in the three-month to May. During the US session, two vice chairs of the Conservative Party, Maria Caulfield, and Ben Bradley, quitted, in protest to PM May's plan.

On Wednesday, the kingdom will release the NIESR GDP estimate for the three months to Jun, while BOE's Governor Carney is scheduled to speak about the global financial crisis at the National Bureau of Economic Research conference, in Boston.

The 4 hours chart for the pair presents a neutral to negative stance, as it met selling interest at around 1.3300, where the pair also has the 200 EMA, and now trades around a flat 20 SMA. In the same chart, technical indicators turned lower, but now lacking directional strength and within neutral levels. The pair has an immediate support around 1.3220, where it bottomed several times during the last few hours, with a break below it, increasing chances for a bearish extension this Wednesday.

Support levels: 1.3220 1.3190 1.3155

Resistance levels: 1.3285 1.3320 1.3365

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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