GBP/USD flirting with lows, 1.3400 mark at risk

Haresh Menghani FXStreet

• Fails to benefit from some renewed USD weakness.
• Brexit news continues to drive sentiment around GBP.
• Second-tier US data eyed for trading impetus.

The GBP/USD pair extended its steady decline through the mid-European session and has now moved on the brink of breaking below the 1.3400 handle.

Despite some fresh US Dollar selling interest, led by renewed uncertainty over the progress of a long-awaited US tax cut legislation, the pair failed to build on early up-move and met with some fresh supply near mid-1.3400s.

Against the backdrop of a setback over the UK PM Theresa May's Brexit plan, comments by the EU Commission Chief Juncker, saying that second phase of Brexit talks will be far more difficult than the first, prompted some selling around the British Pound.

The downslide extended further after the UK PM Theresa May's spokesman came out with a statement that the government has no plans to remove the exit data in the EU withdrawal bill, which is due to be voted in parliament next week.

Moving ahead, traders now look forward the BOE's Quarterly Bulletin and BOE Chief Economist Andy Haldane's comments for some fresh impetus. Later during the NA session, second-tier US economic data might also assist traders to grab some short-term opportunities.

Technical outlook

Mario Blascak, European Chief Analyst at FXStreet writes: "The technical oscillators are pretty neutral with Relative Strength Index on 4-hour chart just above 50 neutral line and pointing downward while Momentum is just above zero pointing upwards. The decisive jump of GBP/USD from $1.3320 key Fibonacci support higher has brought the Slow Stochastics from the Oversold to the Overbought condition within one day only, signaling fragile recovery within current trend higher."

"On the upside, the GBP/USD is facing a Fibonacci resistance combined with downtrend resistance line at around $1.3450 that together with Overbought Stochastics indicates move lower" he added.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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