GBP/USD slides to fresh session lows amid modest USD recovery

Haresh Menghani FXStreet

• Stalls post-UK GDP upsurge near 1.3280 level
• Sharp USD recovery prompting some profit taking

After an initial uptick to 1.3279 level, 7-day tops, the GBP/USD pair met with some fresh supply and has now drifted into negative territory.

The pair failed to build on previous session's UK GDP-led strong up-move and failed ahead of the 1.3300 handle. In absence of any fresh development, a modest US Dollar rebound seems to have prompted some profit taking, following yesterday's sharp upsurge of over 160-pips.

Meanwhile, optimism over Trump's drive to overhaul the US tax code and speculations that the next Fed Chair could steer the policy in a more hawkish direction continues to limit any deeper USD retracement and seems to be the only factor capping any further up-move for the major.

Investors' focus would remain glued to the ECB meeting and Mario Draghi's speech, which could influence the pair's movement through the EUR/GBP cross.

Later during the NA session, second-tier US economic data - initial jobless claims, goods trade balance data, prelim wholesale inventories and pending home sales, would now be looked upon for some fresh impetus.

Technical levels to watch

At the time of writing, the pair was placed at session lows, around 1.3230 area, with FXStreet's technical confluence indicator identifying immediate support near the 1.3199-93 region and then 1.3170 level. On the upside, 1.3240 level is seen as immediate resistance, above which the up-move could get extended towards the 1.3300 handle en-route 1.3320 resistance.

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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