GBP/USD: A phase of bearish consolidation amid notable USD demand

The GBP/USD pair is seen extending its overnight consolidative mode near two-week troughs reached last Friday at 1.2361 levels, as the demand for greenback against its main competitors persists at full steam. The USD index flirts with three-week tops at 101.22, up +0.14% on the day.

The US dollar stood resilient to a weaker US labor market report released on Friday, as markets believed there were a couple of bright spots seen in the US employment data, despite downbeat headline numbers. More so, hawkish comments from FOMC member Dudley provided support to the USD bulls.

Meanwhile, the pound also suffered from mixed UK industrial production data, which weighed on the odds of a BOE rate hike this year. Looking ahead, the spot may find some support from a slight upbeat CFTC data, which showed that the GBP shorts are trimmed a little, when compared to a week earlier. GBP short 100K vs 104K short last week. Shorts trimmed by 4K

Data-wise, we have nothing to report from the UK docket, and hence, focus remains on the US labour market conditions index (LMCI) for fresh incentives.

GBP/USD Levels to consider            

Valeria Bednarik, Chief Analyst at FXStreet notes, “Technical readings in the daily chart favor a bearish continuation for the upcoming days, as the price broke and accelerated below its 20 SMA, whilst technical indicators entered bearish territory, maintaining strong downward slopes. Shorter term, the 4 hours chart shows that the price extended below a bearish 20 SMA and the 200 EMA, whilst technical indicators maintain their bearish slopes near oversold territory, in line with the longer term outlook. Support levels: 1.2330 1.2290 1.2250Resistance levels: 1.2410 1.2450 1.2495.”