16 May 2018
• Persistent USD buying interest exerts downward pressure for the second straight day.
• A decisive break below 1.3450 support to confirm an extension of the downfall.
The GBP/USD pair extended its steady decline on Wednesday and drifted back closer to yearly lows touched in the previous session.
Having repeatedly failed to build on its momentum beyond the 1.3600 handle, the pair traded with a negative bias for the second consecutive session on Wednesday and was weighed down by a strong follow-through US Dollar upsurge.
In absence of any major market moving economic releases from the UK, the USD price dynamics turned out to be an exclusive driver of the pair's momentum through the European trading session on Wednesday.
The pair, however, has been showing resilience at lower levels and finding some decent support near the 1.3460-50 region. Hence, it would be prudent to wait for a decisive break through the mentioned support before positioning for the pair's next leg of depreciating slide.
Next on tap would be the US economic docket, featuring the release of housing market data, which along with Atlanta Fed President Raphael Bostic's scheduled speech will be looked upon for some fresh impetus.
Technical levels to watch
The 1.3450 area might continue to act as an immediate support, which if broken could prompt some aggressive selling and accelerate the fall towards the 1.3400-1.3390 horizontal support. On the flip side, any up-move beyond the key 1.3500 psychological mark is likely to confront resistance near the 1.3515-20 region, above which a bout of short-covering could lift the pair further towards 200-day SMA barrier near mid-1.3500s.
Trading foreign exchange on margin carries high potential rewards but also high potential risks that may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience and risk appetite. Past performance is not indicative of future results, which can vary due to market volatility. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Any opinions, news, research, analyses, prices or other information contained on this website or linked to from this website are provided as general market commentary and do not constitute investment advice. AUSFOREX does not accept liability for any loss or damage, including any loss or profit, which may arise directly or indirectly from use of or reliance on such information.