GBP/USD analysis: scope to test 1.2700/20

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2826

The GBP/USD pair fell down to 1.2810, its lowest in nearly two months, as dollar's short-term demand affected more the weakened Pound. There were a couple of minor releases in the UK that came in above expected, with the CBI industrial trend survey showing that manufacturing grew in August, as the index came in at 13 from July's 10, also beating expectations of 8, while public sector net borrowing, excluding the nationalized banks, was in surplus by £184m in July, the first surplus since 2002, while excluding public sector banks, it increased by £1.9 billion to £22.8 billion in the current financial year-to-date, compared with the same period in 2016. The Pound, however, is unable to attract buyers ahead of the next round of Brexit negotiations, taking place in Brussels next week. From a technical point of view, the downside remains favored, given that in the 4 hours chart, the 20 SMA began gaining downward momentum above the current level, whilst technical indicators hold within bearish territory, with the RSI indicator already gyrating south around 35. A bearish extension through 1.2810 should favor an approach to the 1.2700/20 region, where the pair presents multiple relevant daily highs and lows from earlier this year.

Support levels: 1.2810 1.2755 1.2710

Resistance levels: 1.2845 1.2885 1.2920

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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