GBP/USD approaches 1.4000, third day of losses

Spot continued to correct lower from 1-month highs.
Pound also lost ground vs EUR, JPY, and CHF.

The GBP/USD was headed to the third daily loss in-a-row. It continued to move with a bearish bias and during the US session printed a fresh weekly low at 1.4009. Near the end of the day, it was hovering around 1.4020/25, more than 200 pips below Tuesday’s high.

The US dollar posted mix results. It gained versus the euro and the pound but lost ground against the yen and commodity currencies. It failed to benefit from data. Core PCE rose 0.4% in February (1.6% y/y), as expected, Personal Income (+0.4%) and Personal Spending (+0.2%) also showed numbers in line with market consensus. On the negative front, the Chicago PMI dropped from 61.9 to 57.4 (vs 62.0) while the Consumer Sentiment Index (University of Michigan) declined from 102.0 to 101.4. The last numbers limited US strength.

Cable continues to correct lower. On Monday reached at 1.4243 the highest level since February 2. It tested the highs on Tuesday but failed and started to move to the downside. The move accelerated on Wednesday and continued at a lower rate on Thursday.

With holidays and no relevant economic data to be released on Friday, volatility is likely to remain low ahead of the weekend.

GBP/USD Key Levels

To the downside two key support levels are seen for the pound below the psychological 1.4000: 1.3980, the 20-day moving average and then 1.3910/20, the uptrend line from November lows. On the opposite direction, immediate resistance might lie at 1.4080 followed by 1.4145 and 1.4170/75.

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