- GBP/USD is off the lows but remains weak amid broad USD strength.
- The US dollar cheers upbeat economic data and hawkish Fedspeak.
- Technical indicators remain in favor of bears, with eyes on 1.1850.
GBP/USD is trading close to fresh monthly lows near 1.1900, as bears gather strength for the next push lower.
The US dollar is preserving the ongoing rally, backed by hawkish Fed commentary and upbeat Jobless Claims and Philly Fed Manufacturing guage, exerting beairsh pressures on the pair.
Meanwhile, markets remain cautious amid looming US-China risks and reports that Chinese President Xi Jinping and Russian President Vladimir Putin plan to attend a Group of 20 Summit to be held in Bali later this year.
Meanwhile, the British pound bears the brunt of the slump in the UK Consumer Sentiment, which hit a record low in August. The UK’s dire economic outlook and rampant inflation is likely to accentuate concerns surrounding the BOE’s next policy move.
The immediate focus now remains on UK Retail Sales, with consumer spending likely to show yet another drop in the month of July,
As observed on cable’s daily chart, the triangle breakdown has opened floors towards the 1.1850 psychological level should the 1.1900 level cave in.
The 21-Daily Moving Average (DMA) and 50 DMA bearish crossover also add credence to the additional declines in the near term.
The 14-day Relative Strength Index (RSI) is trading flat but remains below the midline, keeping sellers hopeful.
GBP/USD: Daily chart
If buyers manage to hold onto the 1.1900 round figure, a tepid rebound towards 1.1950 could be in the offing.
Recapturing 1.2000 is critical to unleashing a sustained recovery from monthly troughs.