GBP/USD analysis: steeper decline expected below 1.3340

GBP/USD Current price: 1.3398

The British Pound remained under pressure this past week, ending it against the greenback at 1.3398, as news coming from the UK on Friday were overall negative. BOE´s Governor Carney said that interest rate hikes in the future will be limited and gradual if they happen, pretty much freezing expectations of a change in the economic policy for this year. Also, UK's final Q2 GDP remained unchanged at 0.3% for the three months to June, but the year-on-year figure was downwardly revised to 1.5% from an initial estimate of 1.7%. In the meantime, Brexit negotiations are going nowhere: during the weekend EU Junker claimed that there will be no sufficient progress by the end of October "unless miracles would happen." The political uncertainty alongside with an on-hold BOE should limit Pound attempts to regain the upside. From a technical point of view the daily chart shows that the weekly decline stalled at the 61.8% retracement of the latest upward move, at 1.3340, now converging with the 50% retracement of the same rally and a bullish 20 SMA. Technical indicators in the same chart hold above their mid-lines, with the Momentum trying to recover ground, but the RSI maintaining its bearish slope, this last leaning the scale towards the downside. In the 4 hours chart, however, the pair presents a neutral-to-bearish stance, as the pair remained limited below a bearish 20 SMA for most of the week, but technical indicators head nowhere around their mid-lines. A bearish acceleration through the 1.3340 support, should lead to a downward extension towards 1.3250 the next relevant static support.

Support levels: 1.3340 1.3300 1.3250

Resistance levels: 1.3410 1.3460 1.3510

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