“¢ A goodish USD rebound triggers the initial leg of retracement slide.
“¢ BoE MPC member Haskel’s Dovish comments prompt some aggressive GBP selling.
The GBP/USD pair finally broke down of its Asian session consolidation phase and tumbled to 1.3200 neighborhood in the last hour, albeit quickly recovered few pips thereafter.
Having once again failed to make it through the 1.3300 handle, a goodish pickup in the US Dollar demand, supported by an uptick in the US Treasury bond yields, triggered the initial leg of retracement slide.
The downfall accelerated further following some dovish comments by BoE MPC member John Haskel, indicating a possible rate cut if the economy goes south. Haskel’s comments largely offset BoE hawk Ian McCafferty‘s outlook, one of the three dissenters in last week’s meeting, and prompted some aggressive selling around the British Pound.
The pair reversed all of its gains recorded in the previous two-trading session but seems to have found decent support ahead of the 1.3200 handle and rebounded around 25-30 pips from session lows.
Moving ahead, traders now look forward to the release of Conference Board’s US consumer confidence index, the key highlight from today’s US economic docket, in order to grab some short-term opportunities.
Technical levels to watch
A follow-through weakness below the 1.3200 mark might negate prospects of any further recovery and turn the pair vulnerable to fall back towards 1.3170-65 intermediate support en-route YTD lows support near the 1.3100 handle.
On the flip side, the 1.3275-80 region now seems to act as an immediate hurdle and is followed by the 1.3300 handle, which if cleared now seems to pave the way for an extension of the up-move further towards 1.3355-60 supply zone.
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