GBP/USD analysis: third consecutive lower low keeps the risk skewed to the downside

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2893

UK sales bounced in April, surging for the first time in five months.
UK government keeps talking with Labour opposition.

The GBP/USD pair fell to 1.2865, its lowest since mid-February, trimming daily losses ahead of the close to settle around the 1.2900 level. There was some back and forth about plans of bringing back PM May's deal to the Parliament, with market talks suggesting that it could happen as soon as next week. The headline was later denied by UK's Lidington, who said that the timing depends on conversations with the Labour party. In the data front, the CBI Distributive Trades Survey showed that sales volumes in the kingdom were up in April for the first time in five months, as 49% of retailers said that sales volumes were up in April on a year ago, whilst 36% said they were down, giving a balance of +13%. The encouraging news passed unnoticed, overshadowed by dollar's demand. The UK will release this Friday, March BBA Mortgage Approvals and the CBI survey on orders.

The GBP/USD pair hovers around 1.2900 ahead of Wall Street's close, flat daily basis put posting a third consecutive lower low, indicating that selling interest is still alive and kicking. Shorter term, and according to the 4 hours chart, the risk remains skewed to the downside, as the pair continues developing below a sharply bearish 20 SMA, currently offering a dynamic resistance at around 1.2935, while technical indicators hold within negative levels, the Momentum correcting higher alongside the price but well below its 100 level, while the RSI corrected oversold conditions but lost upward strength, now at around 32.

Support levels: 1.2865 1.2830 1.2795

Resistance levels: 1.2935 1.2980 1.3010

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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