GBP/USD rejected near 1.42 handle, turns lower for second straight session

Haresh Menghani FXStreet

• USD pushes higher and prompts some fresh selling at higher levels.
• GBP further weighed down by dismal UK CBI realized sales data.
• Traders now eye final US Q4 GDP growth figures for fresh impetus.

Having faced rejection at the 1.42 handle, the GBP/USD pair dropped to fresh session lows during the early European session and is now trying to stabilize around mid-1.4100s.

The pair's overnight rebound from multi-day lows was being capped by resurgent US Dollar demand, amid easing trade war fears and the latest geopolitical developments over the issue of denuclearization in the Korean Peninsula.

The British Pound was further weighed down by today's weaker than expected UK CBI realized sales, falling to -8 in March as compared to a reading of +8 in the previous month. Moreover, the market also seems to have fully digested the recent positive Brexit headlines and hawkish BoE vote, with the USD price dynamics acting as an exclusive driver of the pair's mildly weaker tone for the second consecutive session.

Meanwhile, a fresh wave of global risk aversion trade was seen underpinning the greenback's safe-haven demand, against its British counterpart, and further collaborated to the pair's retracement to an intraday low level of 1.4134.

With the only scheduled UK release out of the way, investors now look forward to the release of final US Q4 GDP growth figures, expected to be revised higher, for some fresh impetus.

Technical levels to watch

Weakness back below 1.4135 level is likely to get extended back towards the 1.4100 handle before the pair eventually falls back to test the 1.4075-65 strong horizontal support. On the upside, the 1.4200 handle now seems to have emerged as an immediate hurdle, above which the pair is likely to aim towards surpassing the 1.4225-30 intermediate supply zone and aim towards challenging its next major hurdle near the 1.4290-1.4300 region.

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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