GBP/USD analysis: Pound weak, but holding around 1.3100

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3101

Crisis in the UK cabinet undermining Pound.
Focus on Friday industrial and manufacturing production data.

The GBP/USD pair was unable to extend its gains past the 50% retracement of its latest daily decline and resumed its slide, to end the day around the 1.3100 level after trading as low as 1.3086. The Pound was hit by headlines indicating that UK PM May has called back home her international development secretary Priti Patel, currently in Africa after the minister admitted to holding unauthorized meetings with Israeli officials behind her back. Chances are that May would fire him, just a week after the Defense Secretary Michael Fallon resigned on allegations of sexual harassment. The crisis in the UK cabinet, in the middle of tough Brexit negotiations, will probably keep undermining the Pound. The UK macroeconomic calendar will remain scarce ahead of Friday industrial and manufacturing production data. In the meantime, the risk has turned towards the downside, as the price is back below its 20 SMA in the 4 hours chart, which maintains a modest bullish slope, while the Momentum indicator is crossing its mid-line with a strong bearish slope, as the RSI turned flat around 42, all of which favors a new leg lower on a break below 1.3090 the immediate support.

Support levels: 1.3090 1.3060 1.3025

Resistance levels: 1.3145 1.3180 1.3220

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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