GBP/USD rejected near 1.2600 handle, drifts into negative territory

Haresh Menghani FXStreet

The GBP/USD reversed its tepid recovery move to 1.2600 neighborhood and has now drifted into negative territory for the fourth consecutive session, albeit has managed to recover around 20-pips from lows.

Currently trading around 1.2575 region, having posted a session through at 1.2555, the pair ran through fresh offers during early European session after the Financial Times, citing a memo of Britain's Brexit minister's private meeting with the City of London Corporation, reported that David Davis was “not really interested” in a transitional deal as it would not benefit the UK and might also delay the process of ending country's membership with the European Union.

Moreover, a follow through greenback strength, in wake of Thursday's ECB monetary policy decision, also contributed to the pair's offered tone on Friday. Nevertheless, the pair now seems all set to post its first weekly decline in the previous three.

On economic data front, UK economic docket features the release of goods trade balance data, while from the US the preliminary release of UoM Consumer Sentiment index would be looked upon for short-term momentum play.

Technical levels to watch

A decisive weakness below 1.2550 level, leading to a subsequent break below 1.2535 area, now seems to drag the pair below 1.2500 psychological mark support, towards testing an important support near 1.2430 region. Meanwhile on the upside, recovery momentum above 1.2620 immediate resistance is likely to get extended back towards 1.2675-80 resistance area en-route 1.2700 strong resistance (yesterday's peak).

1. R3 1.2837
2. R2 1.2772
3. R1 1.2679
PP 1.2614
1. S1 1.2521
2. S2 1.2456
3. S3 1.2363

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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