GBP/USD analysis: tough Brexit, dollar strength put the pair under selling pressure

GBP/USD Current price: 1.3276

EUR's weakness, increased chances of a hard-Brexit, weighed on the Pound.
BOE's monetary policy meeting likely to add pressure on the Sterling.

The Pound collapsed alongside with the common currency these last few days, as investors rushed back to buy the greenback, resulting in the GBP/USD pair falling to 1.3210, just a couple of pips away from the yearly low of 1.3203 set at the end of May. UK PM May victory in the Commons House this week for sure signals a recovery of her leadership, but also points for a hard Brexit, denting demand for Sterling. Inflation in the UK remained steady at 2.1% in May, which means that the BOE that will have its monetary policy meeting next Thursday, will probably maintain the status quo, leaving rates unchanged and with no rate hikes in the foreseeable future, which may result in further Pound weakness. From a technical point of view, the downside is favored as in the daily chart, the pair settled below a now bearish 20 DMA at 1.3345, while the RSI hovers near oversold reading. The Momentum indicator, however, remains flat around its 100 level, as the pair held above the bottom of its previous 3-week range. In the 4 hours chart, the bearish potential is stronger, as the pair ended well below bearish moving averages, while technical indicators resumed their declines after the recovery of oversold readings stalled short of their midlines.

Support levels: 1.3250 1.3210 1.3170

Resistance levels: 1.3300 1.3345 1.3390

View Live Chart for the GBP/USD

Share: Analysis feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.