GBP/USD drops to 1-week lows under 1.3100

GBP/USD extended losses and bottomed at 1.3072, the lowest level since July 12. Greenback is consolidating gains across the board while the pound hit also fresh lows versus the euro.

Breaking 1.3100

Cable has been moving with a bearish bias since the beginning of the day. It peaked at 1.3270 during the Asian session but then turned to the downside. It broke under 1.3200 on European hours and slided further. The area around 1.3100 capped initially the downside and after a modest rebound it resumed the decline.

During the second half of the American session it dropped under the 1.3100 handle and fell to 1.3072. It was about to end the day trading around 1.3085/90, 160 pips below Monday’s closing price.

Technical outlook

“Trading below the 1.3100 level for the first time since July 12th, the pair is poised to extend its decline, back to the critical 1.3000 level. Technical readings in the 4 hours chart support the decline, as the price is now below its moving averages, while the RSI keeps heading north, despite being near oversold territory”, said Valeria Bednarik, Chief Analyst at FXStreet.com.

According to her, support levels are seen at 1.3060, 1.3025 and 1.2980 while to the upside, resistance levels at 1.3130, 1.3175 and 1.3220.