GBP/USD weaker, stays below 1.2900

The Sterling seems to have resumed its downside today, now dragging GBP/USD to the 1.2890/80 band, or daily troughs.

GBP/USD attention to US data

Cable is extending the weekly decline on Thursday, testing yesterday’s lows in the 1.2880 region while the 10-day sma at 1.2875 seems to offer some initial contention for the time being.

Sellers stepped in after BoE’s Saunders said that a 25 bp rate hike should have a marginal impact on the economy, while he suggested that recent weakness around the British Pound was due to better prospects of growth in the euro area. Saunders also reiterated that the MPC has tools to act in either way.

Looking ahead, USD-dynamics will remain the exclusive driver of the pair’s price action in light of the publication of US personal income/spending, pending home sales, initial claims and the more relevant PCE.

GBP/USD levels to consider

As of writing the pair is losing 0.29% at 1.2886 facing the next down barrier at 1.2875 (10-day sma) seconded by 1.2873 (low Aug.28) and finally 1.2771 (low Aug.24). On the upside, a break above 1.2939 (55-day sma) would pave the wave for a test of 1.2979 (high Aug.29) and then 1.3031 (high Aug.11).