- Risk-off and USD rebound keeps Cable under pressure.
- US NFP data and Powell’s speech to set the tone for the USD in coming days.
After a brief stint higher in the overnight trades, the GBP/USD pair fell back in the red zone, as the bulls failed to sustain above the 1.40 handle amid a renewed risk-aversion wave triggered by fresh US-China trade threats.
The White House announced that the US President Trump is considering another $100B tariff on China, “in light of China’s unfair retaliation” against earlier US trade actions. The risk currency, GBP, tends to suffer in times of market unrest and panic.
Moreover, a pick-up in buying interest seen around the US dollar against its main competitors, also collaborated to the renewed sell-off seen in Cable, as markets readjust their USD positions heading into the crucial US labor market report and Fed Chair Powell’s speech.
Meanwhile, the GBP bulls also remain on the back foot ahead of the BOE Governor Carney’s speech scheduled later in the American session. “In the absence of any market-moving economic data from the UK, the USD price dynamics and repositioning trade should act as key determinants of the pair's momentum ahead of the key event risk (US payrolls),” FXStreet’s Analyst Haresh Menghani explains.
GBP/USD levels to watch
Haresh adds, “Technically, yesterday's fall marked a fresh bearish break and the pair's inability to extend overnight modest rebound reinforces the negative outlook. Hence, a follow-through weakness below 1.3965 intermediate support should continue dragging the pair further towards testing the 1.3900 handle. On the upside, any meaningful recovery attempts back above the 1.40 handle might continue to confront some fresh supply near the 1.4020-25 region, which if cleared might trigger a short-covering bounce back towards 1.4075-80 heavy supply zone.”
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.