GBP/USD extends slide below 1.4100, down for second day
- Cable extended losses during US session on Dollar strength.
- US Dollar Index climbed back above 90.00 (+0.55%), hitting 1-week highs.
The GBP/USD pair dropped further during the US session amid an ongoing rally of the greenback. The pair printed a fresh daily low at 1.4071.
The slide of the pound so far found support slightly above Tuesday’s low. Near the end of the day, it was trading at 1.4080/85, about to post the second decline in a row and the lowest close in a week.
A new round of USD buying pushed the pair further to the downside. The US Dollar Index rose from 89.35 to 90.09. It was up 0.55%, having the best performance in months. It also rose against commodity currencies.
Data and Fed talk
The pound failed to benefit from a report that suggested that a deal on the Irish border was close. The currency was affected by the Confederation of British Industry report on retail sales for Mach that showed an unexpected decline of 8%.
In the US, data supported the greenback. Pending home sales rebounded in February but the key report was the second estimate of Q4 GDP growth that came in above expectations (2.9% vs 2.7%). Fed’s Bostic, mentioned that interest rate should get back to the neutral level and added that a gradual approach is better than big jumps.
On Thursday, in the UK a new reading of Q4 GDP growth will be released and also data on monetary aggregates. While in the US, economic reports due tomorrow includew Personal Income and Spending, jobless claims and Consumer Sentiment.
GBP/USD Technical outlook
The 4 hours chart shows that the pair fell well below its 20 SMA, while technical indicators entered negative territory, maintaining their bearish strength, notes Valeria Bednarik, Chief Analyst at FXStreet.
According to her, GBP/USD “broke below a short-term ascendant trend line coming from March 16th low, now struggling around it, skewing the risk toward the downside for the upcoming sessions, with the immediate support being 1.4065, the weekly low.”