GBP/USD drops back to 1.4680, could slide further

The GBP/USD pair turned its head back below 1.4700 handle and headed back towards session through level to currently trade around 1.4680.

The pair on Thursday remained muted to disappointing UK economic data and also towards encouraging US economic releases. The Q1 UK GDP growth matched initial estimates of 0.4% but the yearly growth of 2.0% fell short expected 2.1%.

Meanwhile data from the US showed a surprisingly strong growth of 3.4% for durable goods order in April, while growth for core durable goods (ex transportation) remained subdued at 0.3%. Adding to the positive flow, the US weekly jobless claims fell by 10,000 to 268k.

After the US economic releases, the pair initially held static around 1.4700 but started weakening as traders now seek a big fundamental trigger to assist the pair to build on to its recent sharp gains in the past two weeks led by receding 'Brexit' fears.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet noted, "From a technical point of view, the 4 hours chart shows that the technical indicators are retreating from extreme overbought levels, indicating a downward corrective movement its likely, although the 20 SMA heads strongly higher suggesting the decline will be limited."

"Below 1.4675, the post-news low, the decline can extend towards the 1.4600/20 region, where buying interest will likely re-surge strongly. Above the daily high, the immediate resistance is 1.4770, May high, en route to the 1.4810 price zone."