GBP/USD trims losses as USD losses strength, still headed for lowest close in 8 weeks

GBP/USD bottomed at 1.2778, the lowest level since June 27 and during the last hours it has been able to hold move off lows. The greenback lost strength in the market and cable trimmed losses. The pair rose to 1.2805 and at the moment is trading at 1.2800, less than 20 pips below yesterday’s close. 

The pound is among the worst performers in August. So far it lost more than 400 pips affected by uncertainty over Brexit negotiation and the dovish tone of the Bank of England. On Thursday, a new reading of GDP Q2 will be released in the UK while in the US, all eyes will be on the Jackson Hole Symposium. 

GBP/USD Technical outlook 

The pair today extended the slide and confirmed the break of the 1.2850 support area. On a wider perspective, it continues to move with a bearish bias. The 1.2770/80 support area is now being tested and a break lower could open the doors for an extension of the slide. 

In the short-term, “the 4 hours chart shows that the price has fallen further below a bearish 20 SMA, that the Momentum indicator heads south within negative territory, and that the RSI consolidates around 31, all of which maintains the risk towards the downside, favoring an approach to the 1.2700/20 region, where the pair presents multiple daily highs and lows from earlier this year”, said Valeria Bednarik, Chief Analyst at FXStreet.