GBP/USD headed to 100-DMA on notable USD demand?

The bid tone behind the US dollar keeps growing bigger in the European session, now pushing GBP/USD further into the red zone, as the bears eye a test of 100-DMA support located at 1.3111 levels.

GBP/USD: Further downside in play?

The spot is seen making minor recovery attempts from daily lows of 1.3164, although risks remain to the downside amid broadly stronger US dollar and cautious trading prevalent on the European equity markets.

Markets prefer to the hold the world’s reserve currency, the US dollar, in the wake of political uncertainty surrounding the UK and EU over the Brexit talks, while Spain – Catalonia stand-off also continues to dampen investors’ sentiment.

Later today, the pair is likely to get influenced by the USD price-action and risk trends amid a lack of economic releases from the US docket. In the meantime, the GBP traders eagerly look forward to the UK CBI industrial orders data for some fresh trading impetus.  

GBP/USD Technical View

Haresh Menghani, Analyst at FXStreet notes: “Technically, the pair last week did confirm a bearish break down and with short-term indicators gradually drifting into bearish territory, the up-move runs the risk of fizzling out near the 1.3225 horizontal resistance. Momentum beyond the mentioned resistance might trigger a short-covering bounce and lift the pair towards 1.3265-70 intermediate hurdle ahead of the 1.3300 handle.”

“On the flip side, mid-1.3100s now seems to protect immediate downside, which if broken would reaffirm near-term bearish bias and accelerate the fall towards monthly lows support near the 1.3030-25 region,” Haresh adds.