GBP/USD quickly reverses post-UK data dip to sub-1.3000 level, still in the red ahead of US data

• The post-FOMC USD upsurge/Brexit uncertainties kept exerting downward pressure.
• Mixed UK macro data failed to provide any meaningful support and stall the downfall.

The GBP/USD pair trimmed a part of its early steep slide and quickly recovered around 40-pips from an early European session dip to sub-1.3000 level.

The pair extended its retracement slide from three-week tops set on Wednesday and remained under some intense selling pressure for the second consecutive session.

Against the backdrop of fading Brexit optimism, the British Pound was further weighed down by today's mixed UK economic data that showed a third consecutive quarterly drop in the total business investment. The data overshadowed mostly in-line preliminary UK GDP print and an unexpected shrinkage in the UK trade deficit.

Adding to this, a strong follow-through US Dollar upsurge, supported by the Fed's hawkish assessment of the US economy and commitment to continue raising interest rates gradually in the future, dragged the pair to an intraday low level of 1.2987.

The selling pressure now seems to have abated, with the pair quickly bouncing back to the 50/100-day SMA confluence region, around the 1.3025 level, amid a modest USD retracement from closer to monthly tops.

Traders now look forward to the US economic docket, highlighting the release of PPI figures and Prelim UoM Consumer Sentiment index for November in order to grab some short-term opportunities on the last day of the week.

Technical outlook

Mario Blascak, FXStreet's own European Chief Analyst explains: “The Relative Strength Index and Slow Stochastics made a bearish turn moving into the oversold territory. The key area of support at 1.3085 was broken and the currency pair is now in the run to close the Monday morning gap at 1.2960 next.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.