GBP / USD extends decline and approaches 1.2900 as dollar rally

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  • Pound sterling under the spotlight of traders in the context of the European summit.
  • The dollar rose before a fall in the stock markets throughout the world.

He GBP / USD is falling on Thursday, erasing Wednesday’s gains. The price has just dropped to 1.2908, and is trading at 1.2920, under bearish pressure and aiming to test 1.2900. He context of risk aversion is favoring the dollar.

He US Dollar Index (DXY) resumed the raises and erased the losses of the last sessions. It just hit a week high at 93.72. The greenback is favored by a fall in stock markets throughout the world. The announcements of new restrictions on the movement in Europe are weighing on the mood of the markets. Added to this is the lack of agreement in the US for new fiscal stimuli.

In the US, in minutes the report of unemployment benefits, the Empire manufacturing report and the Philly Fed will be published. In addition, several officials from the Federal Reserve (Kaplan, Quarles, Kashkari and Bullard) will speak.

Regarding the Brexi Today is the deadline but it is estimated that UK Prime Minister Boris Johnson will not withdraw from the negotiations despite previous warnings. Optimistic reports show that a deal is still possible between the UK and the European Union. The leaders are meeting in Brussels. Despite the lack of certainty about what will happen, the pound for the moment, is not affected in these hours.

Technical overview

He GBP / USD continues to move this week in a wide range, closer to the floor today, which is in the 1.2860 zone. This level would be exposed to break 1.2900. Below 1.2860 the downward pressures would intensify.

To the upside, the 1.3000 area is once again a resistance; Above, 1.3030 emerges and then the 1.3070 zone that can be seen as the upper limit of the current range. A confirmation on the latter would enable more raises in the short term.

Credits: Forex Street

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