GBP/USD analysis: risk tilts towards the downside

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2259

The GBP/USD pair closed the day modestly lower, still in retreat mode after failing to surpass a major static resistance area around 1.2330. The Pound was hit at the beginning of the London session by disappointing September Retail Sales numbers, as there was no change monthly basis, with the amount of goods bought flat compared to August. Sales increased by 4.1% when compared to September 2015, below the expected 4.8%. Demand in the EUR/GBP pair as an initial reaction to ECB's statement, sent the GBP/USD pair down to 1.2209 daily basis, from where it bounced back in the American afternoon to current 1.2260 region. Overall, the risk tilts towards the downside, particularly if the pair is unable to quickly regain the 1.2300 figure. Technical readings in the 4 hours chart present a neutral-to-bearish stance, as the Momentum indicator is crossing its mid-line towards the downside with a strong downward slope, while the RSI indicator consolidates around 48 and the price battles with its 20 SMA. Renewed selling interest below the mentioned daily low should see the pair extending its decline down to the 1.2100 region this Friday.

Support levels: 1.2210 1.2180 1.2130

Resistance levels: 1.2290 1.2330 1.2375

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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