GBP/USD falls to 1.2960 as pound retreats

GBP/USD broke below 1.2985 and fell to 1.2962 hitting  a fresh 2-day low. Then it rebounded but remains under 1.3000, with short-term technicals favoring the downside.

The recent slide in Cable was triggered by a decline of the pound across the board. Sterling became the worst performer during the US session. There was no particular reason behind the retreat that so far has been modest, in line with a quiet session.

Data and the Fed

US economic data and Fed talk had little impact on the currency market today. US GDP growth for the second quarter showed a positive rate of 1.4% above the 1.3% expected and the 1.1% previously reported. Initial jobless claims rose marginally to 254K, below the 262K of market consensus. The negative report in the US was the pending home sales with a drop of 2.4% in August.

 Janet Yellen will participate at an event in Kansas. Other Federal Reserve official spoke today giving different perspectives. Lockhart said that the November is a live meeting and affirmed that he is comfortable with a rate hike in the coming meeting. Powell, on the other side, explained that the central bank can be patient and mentioned that the US economy is in “good shape”. While earlier, George argued again in favor for raising rates. The US dollar was not influenced by the speeches and is posting mix results in the market.

GBP/USD levels to consider

To the downside, support could be seen at 1.2960 (daily low), 1.2935 (Sep 27 low) and 1.2910/15 (Sep 23 low). On the flip side, resistance levels might be located at 1.3015 (20-hour moving average), 1.3055/60 (daily high), and 1.3090 (Sep 23 high).