GBP/USD bounces-off 4-week low, still well offered below 1.3000 handle

The GBP/USD pair remained well offered below 1.3000 handle and is currently trading close to 4-week low level around 1.2970-75 region. 

The pair initially seemed to ignore the release of weaker UK economic data that showed deterioration in UK manufacturing sector and bulging UK trade balance. Following the releases the pair jumped above 1.3000 psychological mark but the recovery got sold into, dragging the pair to a fresh session low. 

Recent comments from MPC member McCafferty that raised prospects of additional monetary easing by the Bank of England has been the key factor weighing on the British Pound. 

Moreover, sentiment surrounding the greenback remains buoyant after last week's stellar jobs report now seems to have revived hopes of an eventual Fed rate-hike decision during 2016, which might now limit downside for the US Dollar and might continue to exert selling pressure around the GBP/USD major.

In otherwise an uneventful economic calendar, short-term traders will take cues from the preliminary release of US nonfarm productivity and unit labor costs for the second quarter of 2016.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "the 4 hours chart, the price remains well below a strongly bearish 20 SMA, whilst the RSI indicator hovers around 30 and the Momentum indicator holds within negative territory."

"An extension below 1.2960 should see the pair reaching the 1.2920 region, en route to 1.2880. Approaches to the 1.3010/30 region will likely attract selling interest, with only a recovery above 1.3060 denying the possibility of fresh lows ahead."