GBP/USD: Downside opening up towards 1.3300 ahead of Carney & PM May

The GBP/USD pair extends its bearish momentum into a sixth day on Thursday, now flirting with the key support located near 1.3365 region, as the pound remains on the defensive ahead of the BOE Governor Carney’s and UK PM May’s speech.

GBP/USD: Risks tilted towards a test of 1.3250

The bid tone behind US dollar picked-up pace, as we head into early Europe, knocking-off the GBP/USD pair closer towards 2-week lows of 1.3364. The resurgent US dollar demand across the board is seen last minutes, as the European traders hit their desks and cheer Trump’s historic tax relief proposal, which could pave the way for the fiscal progress.

Moreover, strengthening Treasury yields across the horizon on the latest ‘hawkish catch’ from Yellen, citing that the Fed should be wary of moving too gradually, continues to bolster Fed rate hike expectations.

Meanwhile, the BOE Governor Carney’s speech may have limited impact on the pound, as the main driver for Cable could be the speech by the UK PM Theresa May, as she is scheduled to speak n free markets and fiscal prudence at the Bank of England (BOE) conference

Calendar-wise, the US dataflow will be closely eyed, in absence of economic news out of the UK. The US GDP and jobless claims data will be reported alongside the speeches due from the FOMC members Fischer and George.

GBP/USD levels to consider             

According to Karen Jones, Analyst at Commerzbank, “GBP/USD continues to sell off from critical medium term resistance at 1.3600/70, which represents a double Fibo and the 2014-2017 downtrend. Given the convergence of resistance here we would expect this to continue to hold the topside. However currently the intraday Elliott wave counts are neutral to positive. In order to alleviate immediate upside pressure the market will need to fall sub 1.3267 (August high).”