• The UK political crisis, dismal domestic data dragged GBP/USD to a nearly two-week low.
  • The mixed technical set-up warrants some caution before placing aggressive bearish bets.

The GBP/USD pair continued losing ground through the mid-European session and dropped to a near two-week low, around the 1.3555 region in the last hour.

Against the backdrop of the UK political turmoil, dismal domestic data undermined the British pound and dragged the GBP/USD pair lower for the second successive day on Friday. This also marked the fifth day of a negative move in the previous six and seemed unaffected by moded US dollar weakness, weighed down by retreating US Treasury bond yields.

From a technical perspective, acceptance below the 23.6% Fibonacci retracement level of 1.3161-1.3749 move up was seen as a key trigger for bearish traders. The subsequent downfall might have already set the stage for an extension of the recent pullback from the vicinity of mid-1.3700s, or a two-month high touched last Thursday.

Meanwhile, technical indicators on the daily chart – though have been losing positive traction – are still holding in the bullish territory. Hence, any further downfall is more likely to find decent support near the 1.3540-1.3530 confluence. This comprises 100-day SMA and the 38.2% Fibo., which should now act as a pivotal point.

A convincing break below will suggest that the GBP/USD pair has topped out in the near term and dragged spot prices to the 1.3500 psychological mark. The downward trajectory could further get extended towards the 50% Fibo. level, around the 1.3455 region.

On the flip side, the 23.6% Fibo. level, around the 1.3610 region, now seems to act as immediate strong resistance. Any further move up might continue to meet with a fresh supply near the 1.3660 area, which if cleared decisively will suggest that the corrective slide has run its course. The GBP/USD could then reclaim the 1.3700 round-figure mark.

GBP/USD daily chart

fxsoriginal

Technical levels to watch

GBP/USD

Overview
Today last price 1.3569
Today Daily Change -0.0020
Today Daily Change % -0.15
Today daily open 1.3589
 
Trends
Daily SMA20 1.3561
Daily SMA50 1.3416
Daily SMA100 1.3546
Daily SMA200 1.3734
 
Levels
Previous Daily High 1.3662
Previous Daily Low 1.3587
Previous Weekly High 1.3749
Previous Weekly Low 1.3532
Previous Monthly High 1.355
Previous Monthly Low 1.3161
Daily Fibonacci 38.2% 1.3616
Daily Fibonacci 61.8% 1.3633
Daily Pivot Point S1 1.3563
Daily Pivot Point S2 1.3538
Daily Pivot Point S3 1.3488
Daily Pivot Point R1 1.3638
Daily Pivot Point R2 1.3687
Daily Pivot Point R3 1.3713

 

 

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