GBP/USD tumbles to fresh monthly lows after US macro releases

The GBP/USD pair remained heavily offered and extended its downslide to fresh monthly lows following the US macro releases.

Currently trading around 1.2825 region, spot ran through some fresh offers after data released from the US showed that the economy expanded at a must faster pace than previously estimated. According to the preliminary release, the US economic growth for the first quarter of 2017 was revised higher to 1.2%, better-than 0.7% reported earlier and 0.9% revision expected. Meanwhile, the yearly growth rate held steady at 2.2% but was slightly weaker than 2.3% expected. 

Adding to this, durable goods orders dropped less than expected, contracting 0.7% m-o-m during April as compared to 1.4% expected. The disappointment, however, came from core durable goods orders (excluding transportation), which unexpectedly dropped 0.4% during April as against consensus estimates pointing to a growth of 0.4%. 

Today’s mixed US economic data did little to lift the US Dollar, albeit remained supportive of minor recovery gains. 

Meanwhile, the already weaker British Pound was further weighed down by the latest YouGov/Times poll that showed that May's Conservatives lead shrunk to only 5 points against the Labour Party - 43% vs. 38%, which seems to have aggravated worries over a ‘hard Brexit’ scenario. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The pair is technically bearish, although near a key support at 1.2830, the lowest for these last weeks. In the 4 hours chart, the price has accelerated below a bearish 20 SMA, while technical indicators have partially lost their downward strength within oversold territory, with no signs of changing course at the time being. Below the mentioned support, the pair has scope to extend its decline towards 1.2760/70, the low achieved after PM May called for early election."

"Approaches to 1.2900 will likely attract selling interest, but poor US data and a recovery beyond 1.2910, should see the pair correcting higher, up to 1.2950" she adds.