GBP/USD turns back lower to retest 1.30 handle

Haresh Menghani FXStreet

• Investors looked past Trump’s overnight comments.
• A modest USD uptick prompts some fresh selling.
• Brexit concerns keep GBP bulls on the defensive.

After an initial uptick to 1.3037, the GBP/USD pair met with some fresh supply and has now turned lower for the fourth consecutive session.

The pair struggled to build on overnight goodish rebound from 10-month lows and has now moved back on the verge of breaking back below the key 1.3000 psychological mark, albeit the downtick lacked any obvious fundament catalyst.

With investors looking past the US President Donald Trump's overnight comments on the Fed's policy tightening, the US Dollar caught some bids and inched back to the key 95.00 psychological mark and was eventually exerting some fresh downward pressure.

Meanwhile, Irish finance minister Pascal Donohoe's comments on Brexit, saying that Ireland won't agree to undermine the single market and a backstop is necessary, could also be one of the factors denting sentiment surrounding the British Pound.

It would now be interesting to see if the pair is able to find any fresh buying interest or resumes with its depreciating move amid diminishing prospects for an imminent August BoE rate hike action, especially after the recent softer UK inflation figures and yesterday's disappointing monthly retail sales figures.

Technical levels to watch

A fresh wave of selling below the 1.30 handle has the potential to drag the pair back towards overnight swing low level of 1.2957 en-route 1.2930 support and the 1.2900 handle. On the upside, momentum back above 1.3030 level is likely to confront resistance near mid-1.3000s, which if cleared might establish a near-term bullish bias and trigger a short-covering rally back towards reclaiming the 1.3100 handle.

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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