The GBP/USD pair remained under some heavy selling pressure on Wednesday and tumbled to three-month lows, weighed down by a combination of negative forces. Concerns about global economic growth reemerged following the disappointing release of Chinese macro data on Wednesday and were evident from a sharp intraday slump in government bond yields, which benefitted the US Dollar's relative safe-haven status and exerted some downward pressure on the major. The British Pound was further pressurized by negative Brexit headlines, wherein a spokesman for the opposition Labour party confirmed that gaps remained between the Labour Party and the government in Brexit talks.

The bearish pressure remained unabated despite weaker than expected US macro data - monthly retail sales figures and industrial production data. However, an intraday turnaround in the global risk sentiment, triggered by media reports that the Trump administration plans to delay a decision on new car tariffs for up to six months, extended some support and helped limit further losses. The pair finally settled just a few pips above session lows and now seems to have entered a bearish consolidation phase during the Asian session on Thursday.

In absence of any relevant market moving economic data from the UK, the incoming Brexit-related headlines might continue to influence sentiment surrounding the British Pound. Later during the early North-American session, some second-tier US economic releases - housing market data, the usual initial weekly jobless claims and the Philly Fed Manufacturing Index, might further collaborate towards producing some short-term trading opportunities.

From a technical perspective, the pair's inability to defend the very important 200-day SMA and a subsequent slide below the 1.2900 mark clearly points to persistent bearish pressure. The mentioned handle nears a support marked by 50% Fibonacci retracement level of the 1.2396-1.3381 up-move and bearish acceptance below the same sets the stage for a further decline towards testing the 1.2800 handle en-route 61.8% Fibonacci retracement level support near the 1.2775-70 region. On the flip side, attempted bounces might now attract some fresh selling near the 1.2885-1.2900 area and any subsequent move seems more likely to remain capped near the 1.2950-55 region (200-DMA).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex Analysis

Editors’ Picks

EUR/USD chops around amid end-of-month flows, ahead of Trump

EUR/USD is battling 1.11, close to the two-month highs amid choppy trading. Hopes for a fiscal boost in Europe and mixed satisfactory data have supported the currency pair. , Sino-American tensions are rising and investors await President Trump's China announcement.


GBP/USD advances amid US dollar weakness, shrugging off concerns

GBP/USD is trading above 1.23, edging higher amid US dollar weakness and Britain's gradual reopening. Intensifying Sino-American tensions and the Brexit impasse are ignored. 


Cryptocurrencies: $348M in matured derivatives boost the market

Futures and options contracts' expiration brings a wave of volatility to the crypto market. Ethereum takes advantage and attacks resistances in the market dominance chart, Bitcoin goes back. Ripple disappoints despite regaining the third place in market capitalization.

Read more

Canada's economy falls by 8.2% annualized in Q1, better than expected, USD/CAD shakes

The Canadian economy squeezed by an annualized rate of 8.2% in the first quarter of 2020, better than -10% expected. Quarterly, Gross Domestic Product (GDP) squeezed by 2.1%. Most of the downfall occurred in March, with a drop of 7.2%, better than 8.5% projected. 

Read more

WTI drops 4% and eyes $32 mark amid risk-off, weakening demand

The selling pressure around WTI (July futures on Nymex) accelerates following the break below the 33 level, as bears now target the 32 support zone heading into the key US macro data and US President Donald Trump’s response to the Hong Kong issue.

Oil News

Forex Majors