GBP/USD reverses and hits fresh lows near 1.2910
- Cable retreats amid a stronger US dollar across the board.
- Equity prices in Wall Street hold to losses but US yields rise modestly.
The GBP/USD pair dropped from the highest level since Monday at 1.2969 to 1.2912, slightly above Asian session lows. The reversal took place amid a stronger US dollar across the board. Also the pound weakened somewhat with the EUR/GBP rising back to 0.8570.
The South China Morning Post (SCMP) informed that China is looking at what US President Trump is going to do with the Hong-Kong Human Rights and Democracy Act approved on Wednesday that is awaiting his signature to turn it into law. The report weight on market sentiment. Wall Street indexes are lower while at the same time US yields are modestly higher offering support to the greenback.
Contrarian signals about the US/China trade negotiations are now business as usual for markets. Earlier today, the same media informed that the US could delay the application of new tariffs (schedule by December 15) to Chinese goods if a deal was not reach by then, improving market sentiment.
Technical outlook
The pair lost momentum with the recent decline from near 1.2970. It could have formed a double top. The neckline of the patter is seen around 1.2880/1.2900; so a break lower could clear the way to a slide toward 1.2800.
In the very short-term the negative tone prevails. A recovery above 1.2935 would remove the bearish pressure while under 1.2910 it will likely intensify.