GBP/USD trims gains, retreats to 1.3180

The rally of GBP/USD lost strength after the beginning of the American session. The pair peaked at 1.3222, the highest levels in a month and then pulled back. The retreat from the highs found support at 1.3180 and at the moment, it trades at 1.3190/95, up a hundred pips for the day. The decline of the greenback eased during the last hours favoring the retreat of GBP/USD.

Cable is rising for the fourth day in a row and is headed toward the highest weekly close since September of last year. It is the best performance since June. Today the pound received and impulse from UK industrial production data while the greenback extended the slide across the board. The Dollar Index bottomed today at 90.95, the lowest since January 2015.

The recent rally of GBP/USD forced some analysts to change forecasts and perspectives in favor of the pound. “It looks like the recent neutral outlook has shifted to bullish. The target is at the year-to-date high of 1.3265 even though 1.3200 is expected to offer solid resistance”, wrote analysts from UOB Group. 

Technical levels 

To the upside, resistance levels might be located at 1.3220/25 (daily high), 1.3245 (Aug 1 high) and 1.3265 (Aug high). On the flip side, support could be seen at 1.3160 (Jul 27 high), 1.3115 (Sep 7 high) and 1.3085 (Sep 6 high).