GBP/USD Forecast: any recovery attempts might now be capped near 1.29 region

The greenback held steady, while the GBP/USD major staged a minor recovery from one month lows touched on Friday amid subdued trading action on Monday. The major on Friday broke below the 1.2800 handle after a poll showed further narrowing of the May's Conservative party lead before the upcoming UK general election. Adding to this, the US Dollar also inched higher after the preliminary US GDP growth numbers revealed that the economy grew faster than the original estimates, albeit was capped by an unexpected drop in the core durable goods orders.

With both the UK and the US markets closed on Monday, traders would keep close watch on any incoming UK election polls, while the USD price-dynamics, ahead of Friday's keenly watched NFP data, would continue to be a key determinant of the pair's movement through the first trading day of the week.

Technically, the pair, after breaking through a short-term ascending trend-channel, slipped below 1.2820 support, marking 23.6% Fibonacci retracement level of 1.2109-1.3043 recent up-move. Hence, any recovery attempts are likely to be short-lived and the pair seems more likely to extend its near-term corrective slide.

Movement back above mid-1.2800s might confront resistance near 1.2880 horizontal level and further up-move should be capped at the ascending trend-channel support break-point, turned strong resistance, near 1.2920 region.

On the flip side, the 1.2800 handle might provide some immediate support, which if broken would turn the pair vulnerable to break below 1.2775-70 important horizontal support and head towards testing 38.2% Fibonacci retracement level near 1.2685 region.

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Wednesday, 17 July 2019

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