- GBP / USD finds support near 1.3700 amid risk aversion sentiment.
- The BoE hints at a possible rate hike, while Brexit and Evergrande worry markets.
- The technical setup points to further weakness.
The GBP/USD is receding the impressive rebound staged by the fundamental support, while registers small losses during the European session on Friday.
At the time of writing, GBP / USD is trading at 1.3710, down 0.08% on the day, hurt by risk aversion, while the uncertainty about the payment of the Group’s debt Evergrande in China over the next month investor confidence sinks.
Also, the US dollar attempts a rebound after the previous sharp declines, helping the current pullback in the pair. In addition to this, the persistent Brexit concerns they continue to limit the British pound’s upward attempts.
In the latest Brexit update, the European Union fears that its citizens will be barred from flights to the UK due to complex residency rules.
GBP / USD rallied strongly on Thursday and tested the 1.3750 psychological barrier after the Bank of England (BoE) hinted at a growing reason for rate hikesas inflation will stay higher for a longer period. The UK central bank, however, kept its monetary policies unchanged.
The focus is now on CBI UK sales and Fed Chairman Jerome Powell’s speech.
GBP / USD Technical perspectives
Having faced rejection in 1.3750, GBP / USD has turned lower, but the bears have managed to find support at 1.3700.
If the bulls regain control, then a further advance towards the 21-day moving average at 1.3772. However, the bulls will have to break above Thursday’s high first.
The 14-day RSI has turned flat below the midline, suggesting that the downside momentum could resume in the future.
A break from the daily lows in 1.3697 could reinforce bearish interest, opening the doors to the critical support line near 1.3610.
GBP / USD daily chart
GBP / USD additional levels
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