GBP/USD accelerates to the downside and suffers third daily loss in a row
- GBP/USD dropped on Monday for the third consecutive day, down 170 pips from last week high.
- Events ahead: UK Construction PMI, BoE Inflation hearings and US Manufacturing.
Among majors, the pound was on Monday the worst performer. GBP/USD bottomed at 1.2858 and the trimmed losses. Near the end of the US session was hovering around 1.2870, down 170 pips from last week highs.ç
The pound continues to be affected by Brexit concerns. EU Chief negotiator Michel Barnier spoke against UK PM May’s plans for the relationship after Brexit. The October/November deadline approaches and weighs on GBP/USD. Also to Monday’s slide contribute negative UK data (Manufacturing PMI). On Tuesday, the Construction PMI is due and the hearings of the Bank of England Inflation Report. In the US, Manufacturing data will be release and Wall Street will be back to normal after today’s holiday.
Technical outlook
“The pair is struggling around the 61.8% retracement of the 2016/2018 rally, unable to recover above it ever since mid-London morning, which increases the risk of another bearish extension for the upcoming sessions”, said Valeria Bednarik Chief, analyst at FXStreet. According to her, the 4 hours chart, shows the pair trading below its 200 EMA and 20 SMA, while technical indicators consolidate near oversold readings, also leaning the scale toward the downside.
To the downside, support levels might be located at 1.2845, 1.2800 and 1.2770 while on the flip side resistance could be seen at 1.2910 followed by 1.2955 and 1.3000.