GBP/USD Is Breaking A Critical Support Level, May Fall To 1.3571

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GBP/USD Current price: 1.3737

• UK employment figures were upbeat, with the unemployment rate down to 4.7%.
• The UK will publish July inflation data, the CPI is foreseen at 2.2% YoY.
• GBP/USD is breaking a critical support level, may fall to 1.3571.

The GBP/USD pair fell to a fresh August low of 1.3725 on the back of the resurgent dollar’s demand and despite encouraging UK employment data. The country reported an ILO unemployment rate of 4.7% for the three months to June, below the previous 4.8%. The Claimant Count Change printed at -7.8K in July, much better than the previous -114.8K. Additionally, Average Earnings including Bonuses for the three months to June, rose 8.8%, beating expectations and improving from the previous 7.4%.

The upbeat figures were overshadowed by prevalent risk-aversion, exacerbated by softer than expected US data. The UK will publish July inflation data on Wednesday. The Consumer Price Index is foreseen at 2.2% YoY, down from 2.5% in the previous month. The Producer Price Index is expected at 4.8% in the same period, up from the previous 4.3%.

GBP/USD short-term technical outlook

The GBP/USD pair is trading a few pips above the mentioned daily low, maintaining a firmly bearish tone in the near term. The 4-hour chart shows that the pair is hovering around the 61.8% retracement of its July range, with a downward extension favoring a full retracement toward 1.3571. In the mentioned time frame, the 20 SMA accelerated lower, now crossing below a flat 200 SMA. Finally, the Momentum indicator heads firmly lower within negative levels, while the RSI  indicator consolidates within oversold readings.

Support levels: 1.3720 1.3675 1.3630

Resistance levels: 1.3770 1.3825 1.3860

Image Sourced from Pixabay

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.