- Sterling into fresh highs for the new month as a technical correction plays out, but confidence remains on the wobbly side.
- Wednesday is a thin showing for UK data, US Trade Balance to steal the show.
The GBP/USD is trading around 1.3415 as the London markets prepare for their Wednesday session that sees the Pound getting lifted into current highs around the 1.3400 major handle.
Market confidence has spun back into buying the Sterling, which is getting pushed higher following a raft of economic data for the UK’s economy that has turned bullish, in a welcome break for GBP buyers that got hammered in a wave of disappointing economic figures for the GBP that saw the pair tumble from a high of 1.4376 as the Bank of England (BoE) was forced to pull the plug on their highly-anticipated May rate hike. a worse-than-expected economic contraction decided it wasn’t on the cards, and the BoE is now looking at a 2018 rate hike some time in the 3rd or 4th quarters.
Wednesday brings little UK-centric data, which could be a relief for Sterling traders, and only a couple of speeches from Monetary Policy Committee members is slated for the day, at both 10:40 GMT and 14:00 GMT. Market focus will likely turn to the US Trade Balance figures due at 12:30 GMT, and a miss in either direction for the headline figure, expected at $-49 billion, could draw US President Trump’s ire and cause another Tweet-storm.
GBP/USD levels to watch
As noted by FXStreet’s own Valeria Bednarik, the GBP/USD’s technical stance is looking moderately bullish, though a definitive breakthrough of current levels has yet to be seen: “the 4 hours chart shows that the pair met buyers around a mild bullish 20 SMA, while technical indicators have bounced again from their midlines, maintaining strong upward slopes and with the RSI indicator reaching fresh weekly highs, all of which supports additional gains, particularly on a break above 1.3420, now the immediate resistance.”
Support levels: 1.3370 1.3335 1.3290
Resistance levels: 1.3420 1.3460 1.3500
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