GBP/USD slides further on a quiet session, approached 1.2900

The pound dropped further against the US dollar during the American session. On a quiet session, GBP/USD continued to slide and reached 1.2911. At the moment, it trades at 1.2925, down 30 pips from Friday’s close. 

The pair moved all day with a bearish bias, initially affected by risk aversion following another nuke test from North Korea. That bias was reinforced later after the release of the UK construction PMI. The index came below expectations. 

UK construction PMI surprises negatively in Aug, at yearly lows

The pair is pulling back after moving close to 1.3000 on Friday following the NFP report. Then it started to correct lower and it continues to do. 

Near the end of the day, it is consolidation losses on a quiet US session affected by low volume amid a holiday in the US. Tomorrow an increase in volatility is likely as trading will return to full normality.

Technical levels 

To the upside, resistance levels might be located at 1.2945 (20-hour moving average), 1.2965 (daily high) and 1.3000 (psychological).

To the downside the immediate support is seen at 1.2905/10 (Sep 1 & 4 low), followed by 1.2885 (Aug 25 high). 

“Sterling traded heavily, though within its pre-weekend range.  A break of the $1.2860-$1.2880 area would signal a break down of the constructive technical tone that had been building”, said analysts from Brown Brothers Harriman.