GBP/USD headed to 1.2850 amid US dollar bounce, Brexit-jitters

Closely tracks broad US dollar price-action amid a lack of fresh macro news.
Concerns over hard-Brexit keeps the gains in check, as bears guard 1.29 barrier.

Dhwani Mehta FXStreet

The GBP/USD pair faced rejection once again just ahead of the 1.29 handle in Asia, now sending the rates back to test the 1.2850 support, as we head towards a data-empty UK docket.

Broad-based US dollar price-action remains the exclusive driver for Cable so far this week, in absence of fresh catalysts while markets ignore a better sentiment towards risk assets, as reflected by higher Asian equities.

The spot is seen extending its corrective slide further below the 1.29 handle, as the US dollar stages a comeback against its main peers from four-week lows of 94.68 reached earlier today.

More so, looming concerns over a hard-Brexit landing, as the UK government prepares for a no-Brexit deal, further adds to the weight on the GBP, keeping the upside attempts short-lived.

Looking ahead, the pair eagerly awaits the US CB consumer confidence, good trade balance and the UK BRC Shop Price Index for August for fresh trading impetus.

GBP/USD Technical Levels

FXStreet’s Chief Analyst, Valeria Bednarik, notes: “The pair is neutral-to-bullish according to technical readings in the 4 hours chart, as it managed to advance above a still flat 20 SMA, while technical indicators entered positive territory, but the RSI already lost upward strength. A key resistance comes around 1.2935, the 38.2% retracement of the July/August decline, and where the pair met sellers last week. A continued advance above it exposes 1.3010, the 50% retracement of the mentioned slide. Support levels: 1.2845 1.2800 1.2770. Resistance levels: 1.2935 1.2960 1.2990.”

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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