GBP/USD finds support once again near 1.2420 post-UK data

Dhwani Mehta FXStreet

The recovery in the GBP/USD pair remains capped near 1.2470 region, with the bears retaining control amid poor UK data and hard-Brexit fears.

GBP/USD awaits NFP

The cable remains under heavy selling pressure, with weaker-than expected UK industrial and manufacturing production driving the rate back towards the newly-found support near 1.2420 region. Although the spot manages to quickly recover some ground and reverts towards familiar range around 1.2450 levels seen pre-data release.

The UK manufacturing production surprises negatively in Aug, coming in at +0.5% y/y against +0.80% expected and +0.70% previous. While total industrial production data for Aug stood at 0.70% y/y against +1.30% expected and 2.10% last.

The bears remain in command as sentiment remains unfavorable amid renewed Brexit-related jitters, triggered by comments from the French president Hollande. Earlier on the day, Hollande referred to the possibility of a hard Brexit in order to protect the future of the EU, according to a report in the Financial Times.

Later today, the US labor market report will grab a lot of eyeballs, as an upbeat print may almost confirm a Dec Fed rate hike, eventually triggering a fresh rally in the US dollar across the board.

GBP/USD Levels to consider

Omkar Godbole, Analyst at FXStreet noted, “Round figures could continue to act as a support on the downside. If we plot Fib extensions on a move from July 2014 high – Apr 2015 low – June 2015 high suggests a strong support does exist around 1.2217 (141.4% Fibo extension).”

“On the higher side, 1.2458 (61.8% of Nov 2007 high – Jan 2009 low – July 2014 high) could act as a resistance, above which 1.26 could be put to test.”

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.2933

22% Bullish
67% Bearish
11% Sideways

Bias Bearish

1 Month

Avg Forecast 1.2812

8% Bullish
54% Bearish
38% Sideways

Bias Bearish

1 Quarter

Avg Forecast 1.2689

0% Bullish
56% Bearish
44% Sideways

Bias Bearish

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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