GBP/USD: Bears target 1.2875 amid USD recovery, UK election jitters

GBP/USD’s pullback from 1.2870 region ran into 20-DMA resistance placed at 1.2915 levels, knocking-off the rate back to 1.29 handle, in the wake of broad based US dollar recovery.

GBP/USD looks to test 10-DMA support of 1.2875 next

The major came under renewed selling pressure in Asia amid a recovery in the US yields across the curve, especially with the benchmark 10-year yields bouncing-off seven-month lows, which lifted the greenback from multi-month lows struck at 96.47 against its major peers.

More so, the spot looks vulnerable ahead of the key risk events due tomorrow from across the globe, viz., the UK election, ECB meeting and Comey testimony. Comey to say he never told President Trump he wasn’t under FBI Probe – CNN

According to the latest Opinium poll on the UK election, Conservatives are leading with 43%, while Labour stands at 36%. The pound continues to remain undermine, as markets are starting to believe that the UK PM May’s Conservatives Party is likely to fall short of a majority, which could result in a hung parliament.

The latest opinion polls on the UK election may continue to influence the GBP/USD price-action in the day ahead, amid a lack of relevant economic releases from both the UK and US, except for the second-tier UK Halifax HPI m/m data.

GBP/USD Levels to consider            

Valeria Bednarik, Chief Analyst at FXStreet noted: “From a technical point of view, intraday readings favor the downside, given that in the 4 hours chart, the price has settled below its 20 SMA, whilst technical indicators are crossing their mid-lines, entering negative territory. The pair has an immediate support at 1.2840, a magnet level for these past two weeks, while a break below 1.2800 is required to confirm a new leg lower that can extend down to the 1.2750/60 price zone. Support levels: 1.2840 1.2800 1.2760 Resistance levels: 1.2920 1.2950 1.3000.”