GBP/USD hits 5-week lows, about to test March lows
- Cable hits weekly lows and rebounds modestly as US Dollar retreats.
- Pound remains under pressure, close to the key 1.2950/60 support area.
The GBP/USD pair is falling on Monday and heads for the lowest close since mid-February under 1.3000. The technical outlook points to the downside and a test of the March lows around 1.2960 over the next sessions seems more likely.
A quiet session, normality likely to return on Tuesday
With many countries in Europe on holidays, price action remains limited so far, including the GBP/USD. Recently bottomed at 1.2973, the lowest since March. Then bounced to the upside and as of writing trades at 1.2980/85, marginally of lows but still under pressure.
The recovery took place amid a retreat of the US Dollar. But, low volatility and trading in small ranges continue to the dominant theme. The GBP/USD holds under 1.3000 and moved so far in a 25-pip range. Volume is likely to recover on Tuesday.
In the UK, the Brexit drama will take again center stage as Parliament returns from recesses. Data released today from the US showed an increase in the Chicago Fed National Activity Index while Existing Home Sales dropped more than expected in March. The reports had no significant impact on markets. The key data of the week will be on Friday with the first estimate of Q1 GDP. Also, US-China trade talks will be watched closely.
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Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
