GBP/USD analysis: strong data can't offset political jitters

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2715

The GBP/USD pair closed up for a third consecutive day on Friday at 1.2715, still down for the week. Theresa May has been unable to form a government so far, raising concerns over her ability to retain the UK's leadership, with news indicating the DUP is not ready to support her sending the pair to a two months low of 1.2588 mid-week. The rally was reverted by BOE's Haldane, who said he could vote for a rate hike in the next meeting, after voting to keep them on hold the last one. That will mean that at least half of the MPC is ready to tighten amid rising inflation, against Governor's Carney call for patient. On Friday, the kingdom released its CBI Industrial Trends Survey, up to 16, its highest since 1988, indicating strength in the manufacturing sector and partially helping to neutralize political concerns. Technically, the risk remains towards the downside, given that in the daily chart, the price remains below a strongly bearish 20 SMA now at 1.2785, whilst the Momentum indicator remains flat within negative territory and the RSI indicator heads marginally higher around 43. In the 4 hours chart, the price is above a modestly bullish 20 SMA, while technical indicators retreat within positive territory, not enough to confirm a bearish move ahead.

Support levels: 1.2665 1.2635 1.2590

Resistance levels: 1.2750 1.2785 1.2830

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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