GBP/USD finds buyers near July lows, but stays below 1.2830

The GBP/USD pair is seen trying hard to regain the bids and take-out the key support-turned resistance near 1.2830 region as we progress towards the European opening bells.

GBP/USD: Focus shifts to UK Q2 GDP, Jackson Hole

The spot extended its overnight sell-off and breached July lows of 1.2808, only to find the bulls guarding the 1.2800 barrier, as the US dollar lost ground broadly, in the wake of the US President Trump’s latest warning on the US government shutdown.

The USD index stalled its short-covering bounce at 93.55 levels and dropped back to 93.40 levels, while Treasury yields drifted lower, with the shorter duration yields having suffered the most.

Moreover, markets prefer to stay on the side-lines and refrain from placing any directional bets on the major ahead of the Jackson Hole Symposium, which could trigger massive USD moves on the Fed Chair Yellen’s speech.

In the meantime, all eyes will be on the ECB President Draghi’s speech due out shortly for any cross-driven impact on the GBP/USD pair, as attention shifts towards the US flash PMIs for fresh trading impetus today.

GBP/USD levels to consider             

Haresh Menghani, Analyst at FXStreet writes, “bears would now be eyeing for a follow through weakness below the 1.2800 handle, below which the pair is likely to accelerate the fall towards an intermediate support near mid-1.2700s. The pair could eventually break below the 1.2700 handle and test 50% Fibonacci retracement level support near the 1.2685-80 region ahead of the very important 200-day SMA near the 1.2650 region.” 

“On the flip side, any recovery attempts back above the 1.2825-30 region now seems to confront resistance at 100-day SMA, near the 1.2880 region. Any subsequent up-move beyond the 1.2900 handle might remain capped at 1.2920-30 heavy supply zone,” Haresh adds.