GBP/USD analysis: Sterling still among the less attractive

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2727

Business investment trends still negative in the UK, according to Brexit Broadbent.
EU Parliamentary elections adding weigh on vulnerable Sterling.

The GBP/USD pair started the day correcting higher, but the Sterling was unable to hold on to gains, finishing the day unchanged at around 1.2720. There were no new updates on the Brexit´s disruptive situation, although it kept weighing on Sterling ahead of European Parliamentary elections later this week. Tories and Labours have been working on attracting voters, rather looking to replace PM May rather than solve the Brexit stalemate situation. However, the latest polls in the kingdom show that three in five voters are disappointed with politics, with the two parties running neck and neck, painting a more gloomy future for the UK and the GBP. On Monday, BOE's Deputy Governor Broadbent hit the wires, although the only relevant remark he made is that UK business investment trends are still negative, a result of Brexit uncertainty. This Tuesday, the only macroeconomic even scheduled is the CBI Industrial Trends Survey on Orders for May, seen unchanged at -5.

Technically, the consolidative stage has helped intraday technical readings to correct part of the extreme oversold conditions seen these last few days. Nevertheless, the 4 hours chart for the GBP/USD pair shows that the RSI was unable to surpass the 30 level, now heading back south at around 25, while the Momentum indicator lost directional strength, holding flat well into negative ground. The 20 SMA in the mentioned chart has extended its slide, maintaining a strong bearish slope currently at around 1.2785, while the 200 EMA also turned lower, although some 300 pips above the current level. The risk of further declines will become more evident on a break below 1.2705 the immediate support.

Support levels: 1.2705 1.2670 1.2630

Resistance levels: 1.2750 1.2785 1.2820

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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