GBP/USD flirting with lows as health-care vote looms

Haresh Menghani FXStreet

The GBP/USD pair remained under some selling pressure through early NY trading session and dropped to fresh session low near 1.2470-80 band.

A mild US Dollar recovery, despite of mixed durable goods orders and disappointing Markit manufacturing PMI, coupled with the offered tone surrounding the British Pound collaborated to the pair's down-tick in the past couple of hours.

The pair has now reversed upbeat UK retail sales data led gains recorded in the previous session, but despite of corrective slide still remains on track for second consecutive week of strong gains.

Market seems to have largely ignored dovish comments from St.Louis Fed President Bullard noting that labor market improvements have been slowing and a relatively low policy rate would remain appropriate. Bullard further pointed towards possibilities of only one more Fed rate-hike action in 2017, but did little to assist the pair to recover.

• No need for aggressive rate hikes to keep inflation in check - Fed's Bullard

Investors remained cautious ahead of today's House vote on the Trump-backed GOP plan, which would not only replace the so-called Obamacare but would also provide clarity on Trump's ability to deliver on his promises of tax cuts and infrastructure spending.

• U.S. HoR aims to hold procedural vote by 11:15 am et (15:15 gmt) - RTRS

Technical levels to watch

A follow through retracement below 1.2475-70 level could get extended towards 100-day SMA support near 1.2420-10 region, below which the pair is likely to extend the corrective slide towards 1.2360-55 support before eventually dropping to test 1.2300-1.2290 horizontal level.

On the upside, the 1.25 mark now becomes immediate resistance and momentum above the said handle might continue to confront strong hurdle near 1.2525-30 region. However, a decisive strength above 1.2525-30 resistance should accelerate the up-move beyond 1.2560 intermediate resistance and the 1.2600 handle towards the next important barrier near mid-1.2600s.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.2408

37% Bullish
36% Bearish
27% Sideways

Bias Bullish

1 Month

Avg Forecast 1.2227

20% Bullish
75% Bearish
5% Sideways

Bias Bearish

1 Quarter

Avg Forecast 1.2116

9% Bullish
64% Bearish
27% Sideways

Bias Bearish

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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