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The Great Britain Pound (GBP) extended downside movement against the US Dollar (USD) on Thursday, dragging the price of GBP/USD to less than 1.7092. The sentiment however remains bullish due to Higher High and Higher Low on the daily chart.
Technical Analysis
As of this writing, the pair is being traded near 1.7090. A support can be noted around 1.7059, the intraday low of Tuesday ahead of 1.7000, the psychological number & 38.2% fib level and then 1.6940, the 50% fib level.
On the upside, the pair is likely to face a hurdle near 1.7191, the intraday high of Tuesday as demonstrated in the above chart. A break and daily closing above the 1.7191 resistance area could spur a renewed bullish momentum in the long run, validating a fresh rally towards the 1.7300 milestone.
US Jobless Claims
The number of people who claimed incentives for unemployment, during the week ended on July 11, remained 302K as compared to 305K in the week before hence up beating the median projection of 310K, a report by the US labor department revealed today. Generally speaking, higher jobless claims are considered negative for the economy, so the lower than expected actual reading has spurred selling pressure in the price of GBP/USD.
Fed Manufacturing Survey
The manufacturing activity in the US remained 23.9 points in June as compared to 17.8 points in the month before, exceeding the expectations of 16.0 points, a report by the Philadelphia Federal Reserve revealed today. Generally speaking, higher manufacturing activity is considered positive for the economy, so the better than expected actual reading increased the ongoing selling pressure in the price of cable.
Conclusion
Keeping in view the overall technical and fundamental outlook, selling the pair around the current levels appears to be a good strategy, the trade should however be stopped out on a daily closing above the 1.7191 resistance area.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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