GBP/USD: hunting down the 1.30 handle

Currently, GBP/USD is trading at 1.3026, down -0.13% on the day, having posted a daily high at 1.3062 and low at 1.3014.

Fed's Bullard: Drop in US inflation may be persistent, it is concerning for Fed

GBP/USD is hunting down the 1.30 psychological handle, with bulls suffering in the extension of the downside from upon the 1.32 handle. The concerns markets have are stagnant wages yet rising prices and that problem is evident in last week's final data from the UK where new car registrations fell 9.3% in the Jul year, a fourth consecutive negative print for a series that had been positive (with one month’s exception in 2015) since 2012, as noted by analysts at Scotiabank. Meanwhile, Brexit concerns keep the pressure on the pound with plenty of uncertainty and UK Prime Minister May who is expected to deliver an important address on Brexit, so far, keeping cards close to her chest in respect to the negotiations. 

US Dollar unresponsive to Bullard comments, remains flat on day above 93

GBP/USD levels

The analysts at Scotiabank argue that GBPUSD short-term technicals are bearish. "Sterling's undertone remains bearish on the intraday and daily chart. Price is consolidating. Intraday and daily charts reflect heavy selling and bearish price action suggesting rising downside risks."

Meanwhile, Valeria Bednarik, chief analyst at FXStreet explained that the technical picture is bearish as well, "... with further slides expected on a break below the key level, and targeting then the 1.2965 level, given that in the 4 hours chart, the 20 SMA heads sharply lower above the current level, while technical indicators have resumed their declines and stand near oversold levels."