The GBP/USD pair is seen making minor-recovery attempts, although faces stiff resistances near 1.3170 region on its way to 1.32 handle.
GBP/USD: Brexit Summit in focus
The spot held onto the major support located near 1.3125/40 area, and from there attempted a tepid-recovery, as the dust settled after the poor UK retail sales aftermath. The recovery seen in Cable is on the back of ongoing weakness seen in the US dollar across the board, fuelled by a rally in EUR/USD above 1.1800 levels, as the Spanish government seems to have regained their grip on Catalonia.
Spanish Spokesman confirms implementation of Article 155
Catalan Leader threatens Spanish PM to declare formal independence if no dialogue
Meanwhile, with the EU/ Brexit Summit underway, the recovery may remain in check, as the pound could continue to feel the heat from the EU-UK deadlock on the Brexit negotiations, while increased nervousness ahead of the UK PM May’s speech at the Summit could also keep the bulls at bay.
Also, of note for the major remains the US jobless claims and Philly Fed manufacturing index due later in the NA session for further momentum.
GBP/USD Technical View
Axel Rudolph, Senior Analyst at Commerzbank noted: “GBP/USD probably ended a minor Elliott wave abc correction at last week’s 1.3338 high, made close to the 50% retracement at 1.3343. While this level caps attention should remain on the 1.2996 2016-2017 uptrend line. This is the break down point to the 1.2830 38.2% retracement and the 1.2575 50% retracement. The currency pair has recently failed at the 1.3557 2014-2017 downtrend and is thus viewed negatively”.
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