GBP/USD: Bearish momentum to extend on UK Q2 GDP

The GBP/USD pair extends its downward trajectory into a third day today, having refreshed eight-week lows at 1.2778 last hour, as looming Brexit concerns combined with resurgent USD demand weighs down on the spot.

GBP/USD: Focus on UK Q2 GDP, Jackson Hole Symposium

The spot remains under pressure amid renewed UK political concerns surrounding the Brexit issue, which outweighs the US political jitters, in the wake of the White House’s staffing issue and Trump’s threatening a government shutdown over the Border wall funding.

A fresh sell-off was triggered in Cable yesterday on reports that the UK is softening its Brexit stance on the EU court, as the UK PM Theresa May would comprise the UK’s stance to hasten divorce talks with the European Union.

Further, with the UK government publishing the Brexit papers all of this week, today’s being on the UK plans ‘unprecedented alignment’ with EU over data sharing, the selling bias in the major is likely to persist.

Also, the second estimate of the Q2 UK GDP is expected to offer little impetus to the pound, leaving the pair hovering near multi-week troughs sub-1.28 handle. Meanwhile, nervousness markets ahead of the Jackson Hole Symposium will also keep the bulls at bay.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet noted: “From a technical point of view, the 4 hours chart shows that the price has fallen further below a bearish 20 SMA, that the Momentum indicator heads south within negative territory, and that the RSI consolidates around 31, all of which maintains the risk towards the downside, favoring an approach to the 1.2700/20 region, where the pair presents multiple daily highs and lows from earlier this year. Support levels: 1.2780 1.275 1.2710 Resistance levels: 1.2845 1.2885 1.2920.”