GBP/USD analysis: piercing 1.3100 on dollar's strength

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3094

EU's Barnier working on a "close economic relationship."
UK Q2 GDP to be out this Friday, expected to show a 0.4% QoQ growth.

Pound longs finally gave up to dollar's strength, and the GBP/USD pair broke below the 1.3100 level. The GBP/USD pair peaked for the day at 1.3162, following some encouraging Brexit-related comments, as EU's Chief Negotiator Barnier tweeted: “The EU continues to work for an orderly Brexit and an ambitious future partnership with the UK that should include a close economic relationship,” although BOE's chief economist Andy Haldane said that Brexit worries are up, with uncertainty following suit, amid the ongoing uncertainty. There were no macroeconomic releases in the UK, but this Friday will offer final Q2 GDP expected to show a quarterly growth of 0.4%.

The GBP/USD pair retreated sharply after failing to regain ground beyond 1.3170, a major Fibonacci resistance, and now trades below its 20 SMA, which lost its upward strength. Furthermore, technical indicators have entered negative territory, heading into the Asian session with strong downward slopes, anticipating some additional declines ahead, particularly on a break below 1.3055, the low established last Friday, with scope then to extend its decline to 1.2970, should dollar's strength persists.

Support levels: 1.3090 1.3055 1.3010

Resistance levels: 1.3130 1.3165 1.3200

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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