GBP/USD analysis: pulls back from fresh YTD highs

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3479

The GBP/USD pair peaked at 1.3653, its highest since the Brexit referendum following Fed's initial release, in which it left rates unchanged, but the dollar gained traction on news the US Central Bank will begin unwinding its balance sheet starting next October. The Pound ended the day just 30 pips lower against its American rival, boosted at the beginning of the day by upbeat UK Retail Sales figures for August. Sales increased by 1.0% compared with July, and by 2.4% when compared to a year earlier, more than doubling market's expectations. The core readings, excluding fuel prices, were also sharply higher, while all July readings were revised modestly higher. The news sent the pair briefly above the 1.3600 level but pulled back ahead of Fed, holding anyway above 1.3500. Anyway, the pair is heading into the Asian opening around 1.3480, having set a low of 1.3451 on dollar's strength. From a technical point of view, the 4 hours chart shows that the risk has turned towards the downside, as the price is currently below a modestly bearish 20 SMA, whilst the RSI indicator hovers within neutral territory, and the Momentum entered bearish territory, with not enough directional strength at the time being. An extension below 1.3440 is now required to confirm a bearish continuation for this Thursday, with scope then to test the 1.3350/70 region.

Support levels: 1.3440 1.3410 1.3370

Resistance levels: 1.3530 1.3560 1.3595

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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