GBP/USD analysis: shallow recovery reflects Pound self weakness

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3284

GBP benefited from easing risk aversion, but upside potential limited.
UK Nationwide House Price index and money figures to be out next London session.

The Pound benefited just partially from the improved market mood, rising against the greenback up to 1.3306, but being unable to settle above the 1.33 figure. The UK currency has been lately undermined by tepid macroeconomic data and rising concerns about future trade, as Brexit looms. The absence of relevant news these days has only helped Pound from plummeting further. This Thursday, the kingdom will release the Nationwide House Price index for May and April money figures, nothing that can rock the bases, but still a sign of the UK economic health. Technically, and in the short term, the risk remains skewed to the downside as in the 4 hours chart, the pair is unable to surpass its 20 SMA, hovering a few pips below it, while technical indicators continue heading nowhere within negative territory. The pair is holding barely 80 pips away from its yearly low ahead of a fresh catalyst, but today's behavior has shown that a recovery doesn't depend on dollar's weakness but on Pound's possible strength.

Support levels: 1.3245 1.3200 1.3160

Resistance levels: 1.3315 1.3350 1.3400

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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