GBP/USD rebound faces resistance at 1.3450

GBP/USD moved further to the upside from 2-week lows and reached a fresh daily high at 1.3455 during the American session. It pulled back later finding support at 1.3425.

The recovery was boosted by a retreat of the US Dollar that failed to benefit from a slight upward revision of Q2 GDP growth (from 3.0% to 3.1%). After a 4-day rally, the greenback lost strength. 

The Dollar Index peaked earlier today at 93.45, the highest in a month and now is lower for the day, hovering around 93.00. The move so far can be considered as a correction and takes place amid some hawkish rhetoric by Fed’s officials and after the presentation of Trump’s tax reform presentation. 

Technical outlook

GBP/USD broke today a short-term downtrend line removing some bearish pressure. Overall, today’s recovery seems not enough to remove the negative technical tone of the pair. 

An extension of the recovery above 1.3470/80, a relevant technical level, would add more support to the pound, favoring a recovery toward 1.3515.

On the opposite direction, support levels are located at 1.3405/10, 1.3360 (Sep 27 low) and 1.3340 (daily low).