GBP/USD Price Analysis: Cable bears stay hopeful near 1.2750 as US Dollar cheers risk aversion
- GBP/USD fades bounces off one-month low, retreats from 10-DMA.
- Bearish MACD signals, previous support break joins firmer US Dollar to weigh on Cable pair.
- China, banking concerns fuel US Dollar and exert downside pressure on Pound Sterling.
- China inflation, risk catalysts eyed for clear directions.
GBP/USD stays depressed near 1.2745 as it fades the previous day’s corrective bounce off the lowest level in a month amid early Wednesday in Asia. In doing so, the Cable pair portrays the market’s cautious mood ahead of the top-tier China data. However, fears emanating from China’s banking and realty sector join the rating downgrade from Moody’s and Fitch to spoil the sentiment and fuel the US Dollar.
Also read: GBP/USD trips down on woes about global economic growth, also on a solid USD
While portraying the mood, Wall Street closed in the red with major losses among the bank stocks whereas the US 10-year Treasury bond yields dropped to the weekly low of around 3.98% before bouncing off 4.03% by the day’s end.
Technically, bearish MACD signals and the sustained trading below the 10-DMA hurdle, around 1.2770 by the press time, keep the GBP/USD sellers hopeful.
Adding strength to the downside bias is the quote’s previous fall below the rising trend line stretched from early March and June, respectively near 1.2820 and 1.2955.
That said, the 38.2% Fibonacci retracement level of the quote’s March–July upside, near 1.2630, acts as immediate support for the Pound Sterling. Following that, the bears will have more say in directing the GBP/USD prices.
GBP/USD: Daily chart
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Trend: Further downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
