GBP/USD bulls are demoralized; 1.6850 support is under threat

By FXstreet.com | Updated August 01, 2014 AAA

FXStreet (Moscow) - GBP/USD is getting closer to the first local support formed by 100-day moving average on the back of broadband USD rise ahead of NFP - the key risk event of the week

GBP bears show their snarl

GBP/USD is about to finish the fourth consecutive week in decline, which is partially the US Dollar’s fault. USD is strengthening across the board on recent signs of economic recovery and speculation about looming FED policy rate hike, while UK tightening is mostly priced in. Mixed signals from BOE officials don’t help GBP bulls either. Hopes that today’s UK Manufacturing PMI will brighten things up for GBP are illusory, while US Non-Farm Payrolls report has a good chance to surprise to the downside. If this is the case, GBP/USD might return to the week low at 1.6856 and attempt to break below 1.6850 support. This task is not an easy one as there several important technical levels clustered around the above said level (100-DMA at 1.6861 and 20-week MA at 1.6854).

What are today’s key GBP/USD levels?

Today's central pivot point can be found at 1.6890, with support below at 1.6852, 1.6819 and 1.6781 with resistance above at 1.6923, 1.6961, and 1.6994. Hourly Moving averages are bearish, with the 200SMA bearish at 1.6985, and daily 20EMA bearish at 1.7016. Hourly RSI is bearish at 36.

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