GBP/USD weakens back below 1.34 handle after US durable goods orders

The GBP/USD pair stalled its modest recovery move near 1.3430 level and is now headed back to near two-week lows touched earlier.

Currently trading around 1.3390 level, the pair met with some fresh supply and tumbled around 40-50 pips after the US durable goods orders rebounded more than expected in August. Following a sharp 6.8% decline in July, new orders for manufactured durable goods increased by 1.7% in August as against a growth of 1.0% expected. 

Moreover, excluding transportation items, new orders matched expectations and rose 0.2% m-o-m, which coupled with an upward revision for previous month's reading provided a minor boost to the US Dollar. 

Meanwhile, the market seems to have digested the latest survey of the UK retailers and wholesalers, showing UK retail sales for Oct. rose to the highest levels since Dec 2016, with the prevalent strong bullish sentiment surrounding the greenback acting as an exclusive driver of the pair's movement during early NA session.

Next on tap would be the release of pending home sales data for August ahead of scheduled speeches by Minneapolis Fed President Neel Kashkari and the Federal Reserve Governor Lael Brainard. 

Investors, however, would be keenly awaiting remarks from the US President Trump on his tax reform agenda, which would be a key factor driving the USD in the near-term.

   •  US: Trump expected to provide a framework for the tax reform - BBH

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "according to technical readings in the 4 hours chart, as the  20 SMA has finally gained directional strength, heading south above the current level, while technical indicators stand within negative territory, partially losing their downward strength, but far from suggesting a recovery ahead."

"The daily low was set at 1.3363, while a key Fibonacci support comes at 1.3340. A break below this last should see the downward momentum accelerate during the upcoming sessions" she added.