- US dollar’s recovery from last week slide weakens.
- GBP/USD trims losses as it rises back above 1.3050.
The GBP/USD pair is falling for the second day in a row on Monday, pulling back after reaching 1.3169 on Friday, the highest level since March. Before the beginning of the American session, it bottomed at 1.3003, the lowest since Thursday. During the last hour, it trimmed losses and as of writing, it trades at 1.3050.
The rebound in the pair took place as the US dollar lost strength. The greenback is still up across the board, extending the correction it started on Friday. Data from the US did not affect the greenback. The manufacturing sector continued to expand during July as the ISM and PMI Markit showed.
Technical outlook
The main trend is still bullish in GBP/USD but in the very short-term a correction is underway. The 1.3000 area capped the downside and is the immediate support below the next one, standing at 1.2955 (July 28 high).
The recovery will likely face resistance at 1.3070 (July 31 low) and above at 1.3100/05. If the pound keeps the 1.3100 area, it will gain momentum to test 1.3145, probably resuming the bullish trend.
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