GBP/USD breaks below 1.3050 as the US dollar gains momentum

• Pound under pressure ahead of the weekend hits fresh daily lows.
• US Dollar recovers momentum, DXY trims losses still under 93.00

The GBP/USD broke below 1.3050 and tumbled to 1.3017, hitting a fresh two day low. The move lower took place amid a recovery of the US dollar across the board. The retreat in equity markets also hit the pound that dropped to fresh lows.

The greenback gained momentum as equity prices in Wall Street move lower. The Dow Jones is now in red, falling 0.10% and the Nasdaq drops 0.18%. The greenback strengthened during the American session. Expectations about a new round of fiscal stimulus are diminishing.  US economic data showed activity continued to recover in October.

The pound is under pressure ahead of the weekend. EUR/GBP rose to 0.9089, reaching the highest level in two days and turned positive for the week. The Brexit saga continues to be a key driver in GBP.

Technical outlook

From a technical perspective, GBP/USD intraday's outlook continues to point to the downside. Below 1.3020, a test of 1.3000 seems likely. A recovery to 1.3075 would alleviate the pressure and a consolidation above 1.3100 would change the bias.

The weekly chart shows the pound is about to post the highest close since late August, but far from the top, suggesting difficulties in extending the upside.