GBP/USD weaker, testing lows near 1.3400
- Cable comes down to test 1.3400 and below.
- USD pick up behind the down move.
- US ADP report expected at 185K.
The Sterling is intensifying the leg lower this week, with GBP/USD putting the key support at 1.3400 the figure to the test.
GBP/USD focus on ADP
Cable is prolonging the rejection from last week’s tops in the mid-1.3500s and is once again challenging the critical support at the 1.3400 handle, always amidst a buoyant greenback and some renewed concerns over Brexit negotiations.
In addition, spot is flirting with the critical 2014-2017 downtrend line, today just above the 1.3400 mark. A sustainable break below this area could be a bearish sign, indicate of extra pullbacks on the cards.
In fact, UK’s PM Theresa May is under pressure again after Brexit talks stalled and the ‘Irish border’ issue still remains unsolved. May is expected to meet with EU’s Juncker in the very near term (likely today) in order to make further progress in the negotiations and thus clear the way for both parties to start the trade talks towards year-end.
Nothing scheduled data-wise in the UK today, while industrial and manufacturing production figures, the NIESR GDP Estimate and trade balance results are all expected on Friday.
GBP/USD levels to consider
As of writing, the pair is losing 0.42% at 1.3386 and a break below 1.3373 (low Dec.5) would aim for 1.3291 (21-day sma) and then 1.3221 (low Nov.28). On the other hand, the immediate up barrier aligns at 1.3478 (high Dec.5) seconded by 1.3550 (high Dec.1) and finally 1.3658 (2017 high Sep.20).