“¢ The USD started losing ground following an unexpected decline in producer prices.
“¢ Brexit optimism might continue to underpin GBP and help limit any sharp slide.
The GBP/USD pair has managed to rebound around 30-pips from session lows and is now making a fresh attempt to build on its momentum beyond the key 1.30 psychological mark.
The pair faded an early European session bullish spike to mid-1.3000s, closer to over five week tops set in the previous session, and dropped to an intraday low level of 1.2980, weighed down by some fresh US Dollar buying interest.
The USD positive momentum started losing steam following an unexpected drop in the US producer prices, marking the first decline since December 2017 and assisted the pair to recover from an important confluence support, comprising of 100-hour SMA and a short-term ascending trend-line.
With today’s important US macro data out of the way, the EU chief negotiator Michel Barnier’s comments on Monday, saying that a Brexit deal was possible within weeks, should continue to support the British Pound and help limit any immediate sharp decline ahead of Thursday’s BoE monetary policy decision.
Technical levels to watch
Any further up-move is likely to confront fresh supply near the 1.3035-40 region, above which the pair is likely to aim back towards retesting over five-week highs, around the 1.3085-90 area, ahead of the 1.3100 handle.
On the flip side, the 1.2980 region might continue to protect the immediate downside, which if broken might turn the pair vulnerable to accelerate the slide further towards testing the 1.2900 round figure mark.
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