GBP/USD bulls now eyeing a sustained move beyond 1.30 handle

0

   •  A modest USD retracement triggers the initial leg of rebound from 3-week lows.
   •  Positive Brexit headlines provide an additional boost to the British Pound.
   •  Surging US bond yields/Fed rate hike expectations capped any further up-move.

The GBP/USD pair extended its steady intraday recovery move from over three-week lows, with bulls trying to build on the momentum further beyond the key 1.30 psychological mark.

The US Dollar failed to capitalize on overnight strong upsurge to near 1-1/2 month tops and eased a bit on Thursday, which eventually triggered the pair’s initial leg of rebound from an intraday low level of 1.2922.

The British Pound got an additional boost after news agencies reported that Brexit negotiations with the EU may have reached a major breakthrough as Britain tabled new proposals for avoiding extensive border checks on the Irish border.

The new plans, according to an unnamed source from within the EU, were “a step in the right direction”, and “make finding a compromise possible” and eventually lifted the pair to an intraday high level of 1.3002. 

The positive momentum, however, seemed lacking any strong follow-through amid a limited USD downtick, supported by growing expectations that the Fed might continue to raise rates and reinforced by a strong follow-through upsurge in the US Treasury bond yields.

It would now be interesting to see if the up-move is backed by any genuine buying or is once again utilized as an opportunity to initiate fresh selling positions as market participants start repositioning for Friday’s keenly watched US monthly jobs report (NFP).

Technical levels to watch

A sustained move beyond the 1.30 handle is likely to get extended towards the 1.3035-40 horizontal support zone before the pair aims towards reclaiming the 1.3100 round figure mark.

On the flip side, the 1.2960 level now seems to protect the immediate downside and is followed by support near the 1.2925-20 region, which if broken should pave the way for an extension of the pair’s downfall.
 

Get the 5 most predictable currency pairs

About Author

Comments are closed.