GBP/USD pierces 1.3500, challenges 2018 lows
- Cable gathers extra downside traction, test 1.3500 and below.
- USD accelerates the upside near YTD peaks post-NFP
- US economy added 164K jobs in April, missing initial consensus.
The selling momentum is building up around the Sterling and is now forcing GBP/USD to drop to fresh multi-month lows beyond 1.3500 the figure.
GBP/USD breaks below 200-day sma
Cable is accelerating the downside to fresh multi-month lows in levels below the critical 1.3500 support on Friday in response to a sharp pick up in the demand for the greenback despite US Payrolls came in on the soft side earlier today.
The up move in the buck appears to be linked to a flash crash in the ‘panic index’ VIX, which suddenly dropped to lows in the 11.00 region but it has returned to the 16.00 neighbouhood soon afterwards.
In the meantime, spot remains well entrenched into the negative territory, breaking below the critical 200-day sma for the first time since April 2017 and so far recording its third consecutive weekly decline, all ahead of next week’s BoE event.
GBP/USD levels to consider
As of writing, the pair is losing 0.52% at 1.3505 facing the next support at 1.3487 (low May 4) seconded by 1.3457 (2018 low Jan.11) and finally 1.3400 (psychological level). On the upside, a break above 1.3658 (2017 high Sep.20) would aim for 1.3712 (low Mar.1) and finally 1.3758 (10-day sma).