GBP/USD to stay below 1.3400 amid thin markets

1.3400 – a tough nut to crack.
Brexit jitters continue to weigh.
The UK high street lending, US consumer confidence data eyed.

Dhwani Mehta FXStreet

The GBP/USD pair witnessed some volatility in the Asian trades amid the withdraw in liquidity, although traded well within the familiar 30-pips range below 1.34 handle.

GBP/USD: Better UK data ignored?

The spot reversed almost half of yesterday’s rebound spurred by a sharp rally in oil prices, now extending its choppiness around 1.3370 levels, as holiday-thinned light trading exaggerates the moves.

Meanwhile, the US dollar holds steady against it’s a major peers amid unimpressive US macro news, while the dust settles over the US tax and funding bill approval. The USD index trades flat at 92.84, having faced rejection just shy of 93 handle.

Moreover, the major trades listless as upbeat UK growth numbers were offset by looming uncertainty over the Brexit issue, as markets await the next round of the Brexit negotiations for some clarity.

In the day ahead, the UK high street lending data may offer some fresh incentives to the traders ahead of the US pending home sales and CB consumer confidence releases.

GBP/USD Technical Levels

According to Valeria Bednarik, Chief Analyst at FXStreet, “From a technical point of view, and in the short term, the pair maintains a neutral stance, as the price remains attached to a horizontal 20 SMA, although holding above a 200 EMA, and with technical indicators aiming marginally higher above their mid-lines, rather limiting chances of a downward movement than suggesting some additional gains ahead. Solid UK data is being offset by Brexit jitters, a situation that will likely persist until the next round of negotiations offers fresh clues. Support levels: 1.3340 1.3300 1.3260. Resistance levels: 1.3385 1.3420 1.3465.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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