- The recovery of the US dollar across the board losses momentum.
- Quiet US session favors limited volatility, Wall Street post modest gains.
The GBP/USD pair erased earlier losses and rose back to the 1.2700 area. The pair bottomed at 1.2627, but it then rebounded, climbing back into positive territory. Still, it was unable to clearly regain the 1.2700 zone but is it trading at 1.2685, up 20 pips for the day.
The rebound took place as the US dollar weakened again. The DXY turned negative, falling back below 97.00. The greenback is being affected by a decline in US yields. US bonds are higher on Monday, even as equity prices also gain. The Dow Jones is up 0.85% and the Nasdaq 0.30%.
The positive tone around the greenback following Friday’s jobs report vanished while the British Pound remains limited by the increasing risks of a no-deal Brexit.
Technical outlook
The pair holds a bullish tone that will likely prevail despite overbought readings as long as it remains above 1.2630. A slide below would clear the way for consolidation or a correction. Support levels lie at 1.2580 and 1.2530.
On the upside, the 1.2700 zone has become a new resistance, followed by 1.2730/35 (June 5 & 8 high); a firm break above the last one would clear the way for an approximation to 1.2800.
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