GBP/USD meets fresh supply, eyes 1.39 ahead of UK GDP

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 25, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The GBP bulls lost control ahead of European open, sending GBP/USD lower towards 1.39 handle amid risk-off led by the Chinese stocks slump.

    GBP/USD eyes UK datasets

    The GBP/USD pair trades modestly flat at fresh session lows of 1.3916, heading towards 1.3900. The cable’s recovery from multi-year lows faded towards late-Asia, and the prices are now seen drifting lower on the back of a renewed risk-aversion wave that hit markets after the Chinese equities crashed, while lower oil prices also dampened the sentiment around riskier currencies such as the GBP.

    From a wider perspective, the GBP/USD pair remains under pressure as the looming Brexit concerns and massive budget deficits continue to weigh on the British pound. While the upcoming UK’s GDP second estimate also keep the markets unnerved.

    The second estimate of the UK economic growth for Q4 2015 could surprise markets on the downside, although expectations point to a flat headline figure at 0.5%. The first estimate showed the economy grew at the rate of 0.5% versus 0.4% previous.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.3945/54 (daily pivot & high), above which 1.3988/1.4000 (1h 50-SMA/ round number) would be tested. On the flip side, support is seen at 1.3900 (psychological levels) below which it could extend losses to towards 1.3879 (Feb 24 Low).
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