GBP/USD rebounds from near 2-week lows, back closer to 1.3200 handle

   “¢   Cunliffe’s comments triggered the initial leg of recovery.
   “¢   Softer US data-led USD retracement provides an additional boost.
   “¢   US-UK trade deal hopes supportive of the goodish rebound.

The GBP/USD pair rallied around 75-pips from an intraday low level of 1.3103 and has now recovered a major part of its early decline to near two-week lows.  

The pair managed to find decent support near monthly lows, set on July 2 and was supported by comments from BoE Cunliffe, saying that softer Q1 activity was driven by poor weather and the growth path remains broadly intact.

The up-move was further supported by a modest US Dollar retracement from tops following the release of import price data and weaker than expected UoM consumer sentiment index, which fell to 97.1 in July as against previous month’s reading of 98.2.

Meanwhile, positive headlines coming out of the UK PM Theresa May and the US President Donald Trump’s joint press conference, pointing to a possible US-UK trade deal provided a minor boost to the British Pound and further collaborated to the pair’s goodish recovery.

It would now be interesting to see if the pair is able to build on the momentum or struggles to make it through the 1.3200 handle. Nevertheless, the pair remains on track to end the week in the red and possibly the lowest weekly close since Nov. 2017.

Technical levels to watch

The 1.3200 handle might continue to act as an immediate hurdle, above which the recovery move could further get extended back towards 1.3270-80 supply zone en-route the 1.3300 round figure mark.

On the flip side, the 1.3140 level now seems to protect the immediate downside, which if broken might turn the pair vulnerable to test sub-1.3100 level before eventually dropping to YTD low level of 1.3050.