GBP/USD analysis: rejected from above 1.2760 despite another decline of the DXY

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2738

The GBP/USD pair continues to trade in the recent familiar range between 1.2750 and 1.2550, now closer to the upper limit. It traded today on top, but it failed to hold and pulled back. Cable continues to be among the few not being able to benefit significantly from the weaker US dollar. The dovish FOMC contribute to offset the Brexit and political UK drama partially. The attention is fixated on who will be the next Prime Minister. On Tuesday, the CBI retail survey for June is due, and on Wednesday, Bank of England’s Governor Carney and members of the Monetary Policy Committee will testify on inflation and economic outlook before the Parliament’s Treasury Committee. In the US, there are many Fed speeches on Tuesday, including Chair Powell at the Council of Foreign Relations in New York. US yields move back to the downside on Monday keeping the US dollar under pressure. The DXY dropped for the fourth consecutive day posting the lowest close since mid-March.

The weakens of the Pound kept the pair under 1.2750. The daily chart shows a rejection from above 1.2750 and a close near the opening level that reflects the difficulties for the pair to extended the bullish run. Ahead of the Asian opening price is near the 1.2750 critical resistance area and on top of the 200 SMA in the 4 hours chart, a positive signal. In order to gain strength, Cable needs to break clear on top of 1.2750/60. Such a move would be supportive of a rally to 1.2800 initially. However, if it fails to break higher, Momentum will start to point to the downside, validating the current range and potentially leading to further consolidation between 1.2650 and 1.2750.

Support levels: 1.2710 1.2650 1.2630

Resistance levels: 1.2760 1.2800 1.2865

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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