GBPUSD slides further after weak GDP / pre-election polls
Bears accelerated in Asia on Friday, following Thursday’s close in red after attempts above psychological 1.3000 barrier were capped by falling weekly cloud.
Thursday’s red daily candle with long upper shadow signaled rising downside risk, as
the pair came under fresh pressure after weaker than expected UK Q1 GDP.
Additional pressure came on release of the latest polls showing narrowing lead of UK Conservative party against Labour party ahead of June 8 elections.
UK PM May party’s lead narrowed to 5 points (Tories 43% vs Labour 38%), falling to the lowest after having a comfortable lead of 9 points last week.
The pound remains offered in early Europe, with end of week profit taking expected to put further pressure on the pair.
Technical studies turned bearish on lower timeframes as cable took out initial pivots provided by 10/20 SMA’s at 1.2948/32 and acceleration lower also broke below daily Kijun-sen at 1.2901 on daily chart.
Near-term focus turned to key supports at 1.2844/30 (12 / 4 May troughs) break below which would risk extension towards next pivotal support at 1.2786 (Fibo 38.2% of 1.2365/1.3047).
Current pullback is seen as correction of larger uptrend from 1.2108 (14 Mar low) and should be ideally contained at 1.2790 zone, according to wave principles, as the pair is currently riding on the fourth (corrective) wave of five-wave cycle from 1.2108.
Break below 1.2790 pivot would signal stronger correction.
Upside is expected to stay protected by broken 10SMA / daily Tenkan-sen at 1.2950 zone.
Res: 1.2901; 1.2950; 1.2962; 1.3000
Sup: 1.2844; 1.2830; 1.2786; 1.2706
Interested in GBPUSD technicals? Check out the key levels
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
