GBP/USD Forecast: bears take breather near descending trend-channel support

Haresh Menghani FXStreet

The GBP/USD pair kept losing ground on Tuesday and dropped to fresh yearly tops amid persistent US Dollar buying interest, primarily led by a fresh round of sell-off in the shared currency. Adding to this, uncertainty surrounding Brexit negotiations, coupled with the recent dovish BoE tilt exerted some additional downward pressure on the British Pound and dragged the pair to its lowest level since late Nov. 2017.

The pair, however, managed to find decent support near the 1.3200 handle and now seems to have stabilized around mid-1.3200s. There isn't any major market-moving economic data due for release from the UK and hence, the USD price dynamics would play a dominant role in influencing the price-action through the European session. Later in the day, the release of ADP report on the US private sector employment, followed by the second estimate of the US Q1 GDP growth figures would be looked upon for some meaningful trading opportunities.

From a technical perspective, the pair on Tuesday rebounded from a short-term descending trend-channel support but struggled to move back above the 1.3300 mark, which now seems to act as an immediate strong hurdle. A sustained move beyond the said handle is likely to accelerate the recovery move further towards the channel resistance, currently near the 1.3345-50 region.

Alternatively, weakness back below 1.3230 immediate horizontal support might turn the pair vulnerable to extend the downfall and head back towards challenging the 1.3200 round figure mark, also nearing 50% Fibonacci retracement level of the 1.1987-1.4377 upsurge.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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