GBP/USD clings to strong gains above mid-1.3300s
| • Renewed USD weakness helps bounce off 1.3300 handle.
• US tax bill optimism fades and prompts fresh USD selling.
• UK CBI industrial order expectations beat estimates and remain supportive.
The GBP/USD pair held on to its strong recovery gains and now seems to have entered a consolidation phase within a narrow trading range around mid-1.3300s.
The latest optimism over a sweeping US tax code overhaul legislation seems to have faded and a fresh wave of US Dollar selling bias helped the pair to catch some strong bids near the 1.3300 important support.
The market seems to have largely ignored a goodish pickup in the US Treasury bond yields, with concerns over a possible government shutdown and some skepticism over any positive implication of the tax reforms keeping the USD bulls on the back-foot.
Currently placed around the 1.3350-60 region, the pair has now recovered part of Friday's slump to 2-1/2 week lows and was further supported by today's better-than-expected UK CBI Industrial Order Expectations data, coming in at 17 for December as compared to an expected reading of 14.
With the EU leaders formally agreeing to move into the next phase of negotiations with the UK, investors now look forward to any fresh Brexit news for some fresh impetus in absence of any major market moving macro data.
Technical levels to watch
Immediate resistance is pegged near the 1.3380-85 region, above which the pair is likely to surpass the 1.3400 handle and head towards testing 1.3435 supply zone.
On the flip side, 1.3315 level now becomes an immediate support to defend, which if broken might turn the pair vulnerable to break below the 1.33 handle and head towards testing 50-day SMA support near the 1.3265-60 region.
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