GBP/USD: investors increasing shorts, now below 1.3100

GBP/USD made low sof 1.3073 as markets get short of the pound again, extending yesterday's sell-off from above the 1.33 level. 

Investors are fragile around the Brexit situation and earlier today, the IMF cut its UK growth forecast for 2016 to 1.7% from 1.9%. For 2017 it cut massively to 1.3% from 2.2% though. However, on the data front, UK inflation came in marginally higher that expectations June. UK June inflation was up by 0.5% y/y and core inflation came in at 1.4%, slightly higher than expected of 1.3%. In respect of the Producer Price Index, output prices fell to 0.4% yearly basis, vs expectations of a 0.5% decline.

GBP/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that with GBP/USD 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."