GBP/USD struggles to break above one-month-old trading range despite USD sell-off
Although the GBP/USD pair recorded gains for the third day in a row on Wednesday, it failed to break above the upper band of its one-month-old trading range. As of writing, the pair was trading at 1.2960, up 0.34%, or 44 pips, on the day.
The pair failed to take advantage of the heavy sell-off seen in the US Dollar Index during the day after the mixed jobs report from the U.K. failed to attract the investors to the cable. Additionally, the solid performance of the euro boosted the EUR/GBP pair to its highest level since the end of March, further weighing on the GBP.
- UK jobs mixed: Claimants count change downbeat, Wages tick higher
On the other hand, the selling pressure on the greenback remains uninterrupted since the start of the week, with the US Dollar Index losing nearly 2% during the first half of the week. On Wednesday, the fresh developments surrounding the Comey scandal weighed on the USD as the investors turned towards the safer assets like the U.S. Treasury bonds, pushing the yields lower and hurting the demand for the dollar.
After Congressman Al Green called for the impeachment of President Trump, three more Representatives, Justin Amash (Michigan), Carlos Curbelo (Florida), and Walter Jones (North Carolina), showed their supports by claiming that the allegations against Trump, if proven true, could constitute obstruction of justice and an impeachable offense.
- US Rep. Al Green: The President must be impeached
- US Rep. Adam Schiff: Impeachment cannot be perceived as an effort to nullify the election by other means
Tomorrow's economic calendar will feature retail sales figures from the U.K. for March, followed by weekly jobless claims and Philly Fed manufacturing index from the United States. The data is unlikely to have a meaningful impact on the overall market sentiment and investors are likely to remain focused on the political developments.
Technical outlook
At the upper band of the current trading range lies the first technical resistance at 1.3000 (psychological level) ahead of 1.3060 (Sept. 28 high) and 1.3100 (psychological level). To the downside, supports are located at 1.2915 (20-DMA/daily low), 1.2845 (May 12 low) and 1.2770 (Apr. 24 low).
- GBP/USD neutral stance intact – UOB