GBP/USD Forecast: Heading towards a Fibonacci support level at 1.2355

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2443

April Markit Services PMI foreseen downwardly revised to 12.2.
The UK will start trade talks with the US this Tuesday.
GBP/USD extended its decline and seems poised to maintain a negative tone.

The GBP/USD pair is down for a second consecutive day, trading near a daily low of 1.2404 amid renewed demand for the greenback in a risk-averse environment. The UK macroeconomic calendar remained empty this Monday but will include the final version of the Markit Services PMI for April this Tuesday, seen downwardly revised to 12.2. Meanwhile, UK PK Johnson’s spokesman said that the kingdom would start trade talks with the US this week, hoping to reduce trade barriers and tariffs. Talks between representatives of the two countries are expected to last at least two weeks. The lack of progress in Brexit negotiations is also taking its toll on the pound.

GBP/USD short-term technical outlook

The GBP/USD pair is technically bearish, as, in the 4-hour chart it has broken below its 20 and 100 SMA, which anyway lack directional strength. Technical indicators entered negative territory, with the Momentum maintaining its downward slope and the RSI flat at around 43. Once below the 1.2400 figure, the pair has room to extend its decline toward 1.2355, the 23.6% retracement of its latest bullish run.

Support levels: 1.2395 1.2355 1.2310

Resistance levels: 1.2485 1.2530 1.2585

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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