GBP/USD rebounds from 7-week lows near 1.2330

GBP/USD drops to the 1.2330 region earlier on Thursday.
Persistent buying pressure in the greenback keeps the pound depressed.
UK CBI Distributive Trades dropped to -10 for the current month.

Pablo Piovano FXStreet

Further strength in the greenback weighs on the risk complex and drags GBP/USD to revisit the area of multi-week lows near 1.2330 on Thursday.

GBP/USD faces the next support near 1.2270

GBP/USD retreats for the fourth session in a row and extends further the rejection from 2023 peaks near 1.2680 (May 10), an area also coincident with the 2021-2023 resistance line and the 100-week SMA.

In the meantime, recession concerns in the UK economy appears to have been reignited following sticky inflation figures in the UK during April ([published on May 24), which in turn seem to have reinforced the idea of extra tightening by the BoE in the upcoming MPC meetings.

In the United Kingdom, Car Production increased 9.9% year-on-year to April, while the CBI Distributive Trades fell to -10 for the current month (from 5).

GBP/USD levels to consider

As of writing, the pair is losing 0.21% at 1.2338 and faces the next support at 1.2283 (100-day SMA) seconded by 1.2274 (monthly low April 3) and finally 1.2010 (weekly low March 15). On the other hand, the surpass of 1.2668 (2023 high May 8) would open the door to 1.2864 (200-week SMA) and then 1.3000 (psychological level).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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