GBP/USD consolidates gains above 1.2870
|- Cable breaks higher on US Dollar weakness, remains under weekly highs.
- Higher US yields weight on the Greenback on a quiet session.
The GBP/USD pair broke to the upside after trading in a range during hours between 1.2865 and 1.2830. It climbed to 1.2888, reaching the highest level since Monday.
It is trading at 1.2880, consolidating daily gains supported by a weaker US dollar. The greenback lost ground across the board during the American session amid lower US yields. The 10-year dropped toward 1.80%, moving away from the weekly highs it reached a few days ago.
In the UK is all about the December elections. UK retail sales data released today did not affect markets, the same situation applied with US PPI. On Friday, the US retails sales report is due. Market participants will also await for headlines regarding US/China trade negotiations.
“Optimism that the US will rollback tariffs on China’s goods faltered somewhat as negotiations continue to face new problems. Nonetheless, some positive steps were taken, after both countries lifted the ban on poultry imports. On the other hand, the European automobile sector continued waiting Trump’s decision on auto tariff, amid rising expectations that the US President would delay the decision by another 180 days”, explained BBVA analysts.
Key Levels
On the upside, above 1.2885 the critical level is the 1.2900 area: a consolidation on top would clear the way to more gains in the short-term term. Volatility is likely to remain limited ahead of the Asian session. The immediate support lies at 1.2870 and also at 1.2860. A slide below 1.2860 could point to a return to the previous 1.2830/1.2860 range.
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