GBP/USD weakens further below 1.3100 level ahead of US data

The US Dollar extended its march higher, with the GBP/USD pair extending its weakness further below 1.3100 handle to currently trade at a fresh 5-day low level around 1.3065-70 band.

Hawkish comments from various Fed officials, including from the Fed Chair Janet Yellen, indicated a strong case that the central bank would go ahead and raise interest-rate by the end of this year. Increasing Fed rate-hike bets has led to a broad based greenback rally amid thin liquidity on the back of a holiday in UK markets in observance of the Summer Bank Holiday. 

Next on tap would be US economic releases that include - Core PCE Price Index, Personal Income and Spending data, ahead of this week's key NFP data, slated for release on Friday.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "From a technical point of view, the pair is now below the 38.2% retracement of its latest rally between 1.2865 and 1.3278 at 1.3120, now the immediate resistance. In the same chart, the 20 SMA is gaining bearish slope well above the current level, while the technical indicators maintain their bearish slopes near oversold territory, all of which indicates that the risk remains towards the downside."

"The immediate support is 1.3070, the 50% retracement of the same rally, with a break below signaling a downward extension down to 1.3025, the next Fibonacci support."

"A recovery beyond the mentioned 1.3120, on the other hand, can see the pair can recover up to 1.3160, although further gains beyond this last seem unlikely for this Monday."