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GBP/USD witnessed some heavy long-unwinding on the first day of a new week. The cable found some support near the 1.3430-25 region and managed to regain some positive traction during the Asian session on Tuesday. The uptick lifted the pair back closer to the key 1.3500 psychological mark, though the upside seems limited amid absent relevant fundamental catalyst and year-end thin trading volumes, FXStreet’s Haresh Menghani briefs.

Key quotes

“The euphoria over a post-Brexit trade deal faded rather quickly as investors flagged concerns about the exclusion of the crucial services sector from the accord. This, coupled with a goodish US dollar rebound, exerted some additional pressure and contributed to the steep intraday fall.” 

“Relief over the long-awaited US stimulus triggered a fresh wave of the global risk-on trade and pushed the US Treasury bond yields higher across the board. This, in turn, was seen as a key factor that helped revive the USD demand.”

“Repeated failures to find acceptance at higher levels and the subsequent sharp pullbacks warrant some caution before positioning for any further appreciating move. Meanwhile, momentum back above the 1.3500 mark might now confront some resistance near the 1.3540-45 region. This is closely followed by the overnight swing high, around the 1.3575 region.”

“The 1.3430-25 region now becomes immediate support to defend ahead of the 1.3400 mark. Some follow-through selling might turn the pair vulnerable to accelerate the slide further towards mid-1.3300s.”