GBP/USD fragile, puts 1.4000 to the test

Cable extends the bearish sentiment at/below 1.40.
The Sterling remains vulnerable after last week’s YTD tops.
UK’s Q1 GDP figures, Carney next of relevance for GBP.

Pablo Piovano FXStreet

The selling bias around the Sterling remains well and sound at the beginning of the week and is now forcing GBP/USD to threaten the psychological 1.40 support.

GBP/USD weak, eyes on GDP, Carney

Cable is prolonging the bearishness sparked after being rejected from fresh 2018 tops near 1.4380 last Tuesday, at the same time opening the door for further decline in light of the weekly key reversal.

The offered tone around the British Pound gained extra traction following BoE Carney’s comments and mixed UK data last week, adding to the now rising speculations that a (formerly priced in) May hike could not be a done deal after all.

In the very near term, spot is seen under heavy pressure, while all eyes should be on the speech by Governor Carney and GDP figures for the first quarter due on Friday.

Furthermore, GBP speculative net longs climbed to the highest level since July 1 2014 on the week to April 17, as shown by the latest CFTC report.

GBP/USD levels to consider

As of writing, the pair is up 0.04% at 1.4007 and a break below 1.3985 (low Apr.23) would aim for 1.3965 (low Apr.5) and then 1.3852 (100-day sma). On the upside, the next hurdle emerges at 1.4127 (21-day sma) seconded by 1.4175 (10-day sma) and finally 1.4247 (high Mar.26).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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