GBP/USD hits fresh session lows, back below mid-1.3500s

Haresh Menghani FXStreet

• USD catches fresh bid during the early European session.
• Reviving USD demand capping the pair below 1.36 handle.

The GBP/USD pair struggled to build on early up-move and once again ran through some fresh offers ahead of the 1.3600 handle.

The pair retreated from 1.3585 supply zone, marked by the top end of a 3-day old trading range, and dropped to fresh session lows during the early European session. In absence of any fresh development, the latest leg of sharp downslide over the past couple of hours was primarily led by resurgent US Dollar demand.

Growing market conviction that the Fed will stick to its plan to deliver at least three interest rate hikes in 2018, further reaffirmed by the recent hawkish comments by various FOMC members, remained supportive of the reviving USD demand and continued capping any meaningful up-move for the major.

It, however, remains to be seen if sellers remain in control or the pair continues oscillating within a broader trading range amid virtually empty economic docket. Meanwhile, this week's key macro releases from the US and the UK might provide the required momentum to assist the pair to break out of this range.

Technical levels to watch

A follow-through retracement below 1.3525 level is likely to accelerate the fall towards the 1.3500-1.3490 support area, which if broken might pave the way for an extension of the pair's downward trajectory towards the 1.3435 intermediate support en-route the 1.3400 handle.

On the upside, any up-move beyond 1.3585 supply zone is likely to confront strong resistance near the 1.3600-1.3610 region, above which a fresh bout of short-covering could lift the pair back towards 2017 highs resistance near the 1.3655-60 region.

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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