GBP/USD placed at the lower end of 5-day old trading range

Haresh Menghani FXStreet

The GBP/USD pair prolonged its consolidative price action and is currently placed closer to the lower band of its five-day old trading range, near 1.2775 level.

The pair traded with mild bearish bias for the third consecutive session and continued with its struggle to build on previous week's strong up-surge led by the UK PM Theresa May's announcement to call for a snap election on June 8th.

A modest greenback recovery, with the key US Dollar Index moving back above the 99.00 handle, seems to be only factor weighing on the major. Renewed optimism over the US President Donald Trump's pro-growth economic policies now seems to be extending some immediate support for the buck. Hence, investors now wait to hear more about Trump's "massive tax cut" plans, which he said is coming this week.

Today's economic docket features the release of UK Public Sector Net Borrowing, while from the US Conference Board's Consumer Confidence Index would grab the spotlight later during NA session. Apart from consumer confidence data, the release of House Price Index (HPI), New Home Sales and Richmond Manufacturing Index would also be looked upon for some short-term trading impetus.

• What's the outlook for the US economy? - Nomura

Technical levels to watch

On a sustained break below 1.2775-70 support, leading to a subsequent break below mid-1.2700s, would turn the pair vulnerable to aim back towards 1.2710-1.2700 support area. On the flip side, momentum back above the 1.2800 handle might continue to confront resistance near 1.2835-40 resistance area, above which a fresh bout of buying interest is likely to lift the pair back towards reclaiming the 1.2900 handle with some intermediate resistance near 1.2870-75 zone.

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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