- GBP/USD has started the new week under bearish pressure.
- The pair could suffer additional losses in case 1.3530 turns into resistance.
- US Dollar Index stays in the positive territory early Monday.
GBP/USD has snapped a four-week winning streak and lost nearly 1% last week as the British pound continued to lose interest following Friday's disappointing retail sales data. The pair stays under bearish pressure in the early European session on Monday and closes in on the key 1.3530 support.
Although the greenback struggled to gather strength amid falling US Treasury bond yields, the risk-averse market environment weighed on the British pound ahead of the weekend.
Later in the session, IHS Markit will release the flash Manufacturing and Services PMI reports for the UK. Investors expect these reports to reveal an ongoing expansion in the private sector's business activity at a robust pace. In case the PMI figures fall short of market expectations, GBP/USD could extend its slide and vice versa.
Meanwhile, Sue Gray, the senior civil servant who has been investigating the "Partygate" scandal, is expected to publish her findings this week. The pound should find it difficult to stage a rebound with investors staying on the sidelines while waiting for that report, which could have serious implications for British Prime Minister Boris Johnson.
In the second half of the day, Markit PMI data will be featured in the US economic docket but market participants will pay close attention to Wall Street. S&P Futures are currently up 0.7% on the day and a decisive rebound after the opening bell could help GBP/USD pare some of last week's losses.
GBP/USD Technical Analysis
GBP/USD stays below the 100-period SMA on the four-hour chart. Confirming the near-term bearish bias, the Relative Strength Index (RSI) indicator on the same chart continues to move sideways near 40.
On the downside, 1.3530 (Fibonacci 38.2% retracement of the one-month-old uptrend) aligns as the first support. In case this level turns into resistance, the pair could target 1.3500 (psychological level) and 1.3460 (200-period SMA).
Strong resistance seems to have formed at 1.3600 (fibonacci 23.6% retracement, 100-period SMA). A daily close above that level could be taken as a bullish sign and open the door for a more decisive rebound toward 1.3640 (50-period SMA).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD rises toward 1.0800 as USD weakens
EUR/USD has gained traction and advanced toward 1.0800 in the early American session on Monday. The positive opening witnessed in Wall Street makes it difficult for the US Dollar to find demand and helps the pair continue to push higher.
GBP/USD closes in on 1.2300 as mood improves
GBP/USD has preserved its bullish momentum and advanced to the 1.2300 area in the second half of the day on Monday. The risk positive market atmosphere makes it difficult for the US Dollar to stay resilient against its rivals and fuels the pair's daily rally. Eyes on BOE Governor Bailey's speech.
Gold: XAU/USD pared losses and consolidates around $1,950.00 Premium
Spot gold trades in the $1,950 price zone, sharply down on Monday as investors move away from safe-haven assets. The sentiment is positive at the start of the week amid easing concerns related to a global banking crisis.
Four reasons why SUSHI holders will have a bullish week despite SEC's move
SushiSwap price undid the early March gains in the last week after the SEC subpoenaed the platform’s head chef Jared Grey. As a result of this announcement, the token collapsed by roughly 18%.
Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk
BABA shareholders begin the week with a glimmer of hope after founder Jack Ma was seen visiting China after spending more than one year abroad. The report originally led to Alibaba's shares in Hong Kong rising 4% before subsiding.