- Closely tracks DXY price-action.
- Brexit headlines will continue to weigh.
- Focus shifts to the US industrial figures.
The GBP/USD pair failed once again to sustain above the 1.38 handle, now accelerating the corrective slide from fresh post-Brexit vote highs reached at 1.3836.
GBP/USD back to test 5-DMA at 1.3768
The spot ran into the key resistance zone located near 1.3835, as the US dollar is seen recovering early losses versus its main peers, having dipped to the lowest levels since Dec 2014 at 89.98. The USD index looks to stabilize near 90.25 levels, as attention now turns towards the US industrial production data due later on Wednesday.
The AceTrader Team explained, “although the greenback snapped its recent losing streak initially on Tuesday and staged a rebound against the majority of its peers on short-covering, the intra-day decline in U.S. stocks where the Dow tumbled from record highs of 26086 triggered renewed broad-based USD selling in late New York trade.”
Despite the latest upsurge, Cable remains weighed down by the uncertainty over the Brexit deal, especially after the UK PM May’s spokesman said that Britain will be the leaving EU. Earlier on Tuesday, the European (EU) Council President Donald Tusk's comments earlier that the UK can have a "change of heart" on Brexit and EU still open to the UK staying in the EU.
Meanwhile, with the UK core-CPI easing to 2.5% versus 2.7% previous, the BoE rate hike is back on the table. However, markets believe that the BoE may not hike rates this summer, as the Brexit fears ramp up, which in turn keeps a lid on the pound’s upside.
GBP/USD Technical Levels
Valeria Bednarik, Chief Analyst at FXStreet, noted “Technically, the 4 hours chart shows that the Momentum keeps easing within positive territory, but also that the 20 SMA maintains its bullish slope far below the current level, while the RSI hovers in overbought territory leaning the scale towards the upside. As commented on a previous update the pair has a strong static resistance area around 1.3835, February 2016 low, now the level to surpass to consider a steeper recovery ahead. Support levels: 1.3740 1.3700 1.3660. Resistance levels: 1.3800 1.3835 1.3860.”
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.