GBPUSD Takes A Steeper Bearish Hit Post Failing To Reclaim Positive Momentum

As the greenback continues to grow strong positive bond yields and bullish economic readings, GBP and EUR gain tremendous pressure. However analysts believe that GBP still has potential to regain bull momentum despite pressure from greenback as the general investors and traders perceive Bank of England’s stand in raising interest rate as hawkish. Some analysts call the pair’s current situation as fundamentally stretched with possibilities to regain upper hand in long term.

GBPUSD Loses Touch with Support

So far the pair tried to break above the resistance of 1.4000 over strength gained from ECB press conference, interest rate decision and positive reading in UK Gross mortgage approvals and CBI distributive trade survey data. But the pair has failed to take advantage of momentum as bears took advantage of the intraday 100-pip rally to establish new short position which led to another risk at steeper slide in price range. Despite GBPUSD falling into another steep downside momentum traders are positive that positive Q1 GDP results from UK or a bearish reading in Q1 US GDP data to be released today could help the pair regain bullish momentum it lost during yesterday’s trading session.

Adding to GBP’s woes GBP consumer confidence data tanked earlier today morning with a bearish reading. However Nationwide House price index readings remained unchanged on both monthly and yearly basis. We have already seen a notable retracement from GBP/USD over the past few weeks, pulling the pair back from post-Brexit highs. Yet, the correction hardly puts the pair back into balance with fundamentals. Investors continue to look for a catalyst in UK’s GDP reading today to help build bullish momentum post GBP’s stunts during yesterday’s trading session.

UK’s GDP data is scheduled to be released at 8.30 GMT and the reading is expected to stay at0.4% QoQ basis. A miss can make traders wonder if a rate hike is coming on May 12 as the previous data missed expectations and BOE officials expressed doubts about a rate hike at the next BOE meeting. Whatever the outcome, GDP data result is expected to cause quite a stir during today’s trading session. The current trend overall remains bearish for GBP. Support & resistance for the pair are at 1.3900/1.3711 and 1.4000/1.4100 respectively.