GBP/USD stumbles below 1.3450, Sterling bulls on the backfoot ahead of Wednesday's inflation hearing
- Sterling heading lower on the new week as positive trade vibes boost the Greenback.
- Brexit continues to swamp the GBP, Scottish independence comes back into the light.
The GBP/USD is trading down in early Monday trading, kicking down below 1.3450 as the US Dollar makes a broad market recovery on easing trade fears.
This weekend saw a relaxing of trade tensions between the US and China, as the two parties agreed to hold off on imposing any further trade tariffs while they continue the negotiation process. Markets are reacting positively to the news, and the US Dollar is rebounding across the board.
The Sterling continues to suffer at the hands of disappointing economic figures for the UK's economy, and headlines highlighting the many gaps that still exist in patching up the Brexit framework. The final exit day of next March has been stricken from legislation, and the UK may wind up staying within the EU's trade union for several years, while the Irish border debate remains unresolved and talks of another Scottish independence vote loom on the horizon.
The week is starting off on a quiet note for the Sterling, although Wednesday will be bringing Inflation Report Hearings at 08:00 GMT, followed by Retail Sales on Thursday. Following the recent slump in economic data for the UK, GBP bulls will be hoping that a rebound in inflation and Retails Sales can bring the GBP/USD back into the running.
GBP/USD levels to watch
Technical indicators are beginning to turn mixed for the pair, though a bearish stance remains the overarching trend following the pair's break below the recent consolidation range, and as FXStreet's own Valeria Bednarik noted about the pair's technical outlook: "technically the daily chart shows that the 20 DMA heads south almost vertically some 100 pips above the current level, and also that the Momentum indicator heads nowhere right below its mid-line, while the RSI indicator heads lower at 26, having spent almost a month in oversold territory. In the 4 hours chart, the pair presents a neutral-to-bearish stance, holding below a modestly bearish 20 SMA, and with technical indicators heading south, the Momentum within neutral levels, but the RSI gaining downward traction, now around 40, favoring additional declines ahead."
Support levels: 1.3450 1.3410 1.3370
Resistance levels: 1.3490 1.3520 1.3570
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
