GBP/USD extends corrective slide to 5-DMA

The GBP/USD pair remains under pressure in early Europe, extending its corrective slide from last US session, as the US dollar keeps its broad recovery mode intact amid a data-empty UK docket ahead.

GBP/USD losing sight of 1.31 handle?

Currently, GBP/USD drops -0.26% to 1.3041, having posted fresh daily lows at 1.3034 in the last hour. The cable ran through fresh offers just shy of 1.31 handle in early Asia, and ever since the bears are on a roll, sending the rate lower to test 5-DMA support.

The renewed sell-off in the GBP/USD pair is mainly driven by a short-covering rally seen in the US dollar across the board, as markets resort to readjusting their positions heading into the GDP data from both the UK and US next week.

Carol Harmer, Founder at charmertradingacademy.com, noted, “We can actually keep stops quite tight on this market now in the 1.2975 region, as if we break below here there will look to be further downside pressure evident....We would then expect the market to weaken down towards 1.2955/45 and even down there we would be buyers...We would only worry about longs if we lost 1.2880....Now on the topside the sellers are evident in the 1.3120/40 area....They held this resistance like soldiers at battle stations.”

GBP/USD Levels to consider            

The pair has an immediate resistance at 1.3085 (10-DMA), above which 1.3100 (round number) and 1.3143 (50-DMA) would be tested. On the flip side, support is seen at 1.3000 (round figure) below that at 1.2943 (Sept 21 low) and at 1.2900 (key support).