GBP/USD remains depressed below 1.2700 mark ahead of US data

No-deal Brexit fears continue to keep a lid on any attempted bounce.
The USD builds on the overnight bounce and adds to the selling bias.
Investors now look forward to the US economic data for fresh impetus.

Haresh Menghani FXStreet

The GBP/USD pair failed to capitalize on its intraday up-move beyond the 1.2700 handle and quickly retreated around 25-pips in the last hour.

Having dropped to weekly lows, around the 1.2660 region, the pair gained some traction during the early European session but lacked any strong conviction amid increasing fears of a no-deal Brexit.

The favourite UK PM candidate Boris Johnson's commitment to leave the EU by October 31st, even without a deal held the GBP bulls on the sidelines and continued capping the attempted up-moves.

Investors were further discouraged by the BoE Governor Mark Carney's comments that uncertainty is hurting economic performance and that the central bank may cut rates in case of a no-deal Brexit.

On the other hand, the US Dollar remained supported by the overnight not so dovish comments by St Louis Fed President James Bullard and the Fed Chair Jerome Powell, which added to the selling bias.

Meanwhile, the downside remained limited, at least for the time being, as investors now look forward to Wednesday’s key highlight – the release of US durable goods orders data, for some fresh impetus.

Technical levels to watch

As Yohay Elam, FXStreet's own Analyst notes – “Some resistance awaits at 1.2710 which provided support to the pair earlier this week. It is followed by 1.2765 which was temporarily broken. 1.2815 was a swing high in mid-May, and it is followed by 1.2870 which was April's low.”

“Below uptrend support, the next line to watch is 1.2660 which is the daily low. It is closely followed by 1.2640 that provided support twice in June. 1.2605 capped GBP/USD in mid-June and served as support beforehand. 1.2558 and 1.2505 are next,” he added further.

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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