Below 1.4350, GBP/USD Seems Vulnerable to Further Downslide

Below 1.4350, GBP/USD Seems Vulnerable to Further Downslide

16 May 2016, 09:10
Roberto Jacobs
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Below 1.4350, GBP/USD Seems Vulnerable to Further Downslide

The GBP/USD pair is attempting to extend its rebound from 100-day SMA support and has now moved back to the high point of the day near 1.4370.

The pair on Friday fell sharply to a 15-day low of 1.4340 after US monthly retail sales data delivered a positive surprise for US bulls. However, in absence of any major economic releases on Monday, except for the Empire State Manufacturing Index from the US, the pair is more likely to remain within a broad trading range ahead of the CPI, employment and retail sales data from the UK, slated for release during the course of the week.

From technical perspective, the pair has got rejected from 1.4500 handle and has subsequently broken below 1.4390-80 support area marking 50% Fibonacci retracement of 1.4009-1.4770 up-move. Hence, a follow through selling pressure below 100-day SMA support might open room for further near-term depreciating move for the pair.

Technical levels to watch

Weakness below 100-day SMA support near 1.4350 seems to drag the pair immediately towards 1.4300 important support, which if broken might now turn the pair vulnerable to resume its medium to longer-term downward trajectory.

Meanwhile on the upside, the 50% Fibonacci retracement level support break-point near 1.4380-90 now become immediate hurdle to clear. Strength above this immediate resistance, leading to momentum above 1.4400 handle, might assist the pair further towards its next major resistance near 1.4445-50 area.


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