• Resurgent USD demand prompts some fresh selling on Friday.
• Brexit uncertainties continue to dent sentiment around the GBP.
• Traders now eye US monthly retail sales data for some impetus.
The GBP/USD pair extended its sharp intraday slide and is currently placed at the lower end of its daily trading range, just a few pips above mid-1.2500s.
After yesterday's failure ahead of the 1.2700 handle, the pair met with some aggressive supply and was being weighed down by a strong pickup in the US Dollar demand. In fact, the index that measures greenback strength jumped to 18-month tops, around mid-97.00s, and was seen as one of the key factors exerting fresh downward pressure.
Moreover, the latest optimism over the UK PM May's victory in the leadership challenge on Wednesday might have already faded and concerns over May's ability to get her Brexit deal through the parliament now seemed to dent sentiment surrounding the British Pound.
As Mario Blascak, FXStreet's own European Chief Analyst explains, “the uncertainty over the future of the Brexit deal is still hanging in the air as the UK parliament schedule shows no Brexit deal vote before Christmas. This strategy is putting an increased pressure on lawmakers in the UK parliament to approve the Brexit deal negotiated by Theresa May in a last minute vote or risk a no-deal Brexit scenario.”
Meanwhile, possibilities of some short-term trading stops being triggered on a sustained breakthrough the 1.2610-1.2600 horizontal support might have further collaborated towards aggravating the selling pressure and accelerate the downfall.
It would now be interesting to see if the pair is able to attract any buying interest at lower levels or the ongoing slide marks the end of recent corrective bounce and the resumption of the prior/well-established bearish trend.
Traders now look forward to the US economic docket, highlighting the release of monthly retail sales data, in order to grab some short-term opportunities on the last trading day of the week.
Technical outlook
“Technically, the GBP/USD is still capped within a downward sloping trend with technical oscillators like Momentum and the Relative Strength Index both zig-zaging lower and Slow Stochastics about to maker a bullish crossover just above the oversold territory. The GBP/USD is still trapped in a downward sloping trend on a 1-hour chart with 1.2550 and 1.2500 being the next target” Blascak adds further.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Bitcoin price could be primed for correction as bearish activity grows near $66K area
Bitcoin (BTC) price managed to maintain a northbound trajectory after the April 20 halving, despite bold assertions by analysts that the event would be a “sell the news” situation. However, after four days of strength, the tables could be turning as a dark cloud now hovers above BTC price.
Bank of Japan's predicament: The BOJ is trapped
In this special edition of TradeGATEHub Live Trading, we're joined by guest speaker Tavi @TaviCosta, who shares his insights on the Bank of Japan's current predicament, stating, 'The BOJ is Trapped.'