GBP/USD crawls higher and returns above 1.2300
|- GBP/USD rebound from 1.2233 extends to session highs at 1.2335.
- The pound pares losses as the dollar pulls back after the release of mixed US data.
- The pair faces a key resistance level at 1.2335 – Credit Suisse.
The pound has been trading firm during Thursday’s US session to pare Wednesday’s losses, stretching to session highs above 1.2300. The sterling has shrugged of yesterday’s weakness to appreciate 0.4% through the day, buoyed by US dollar weakness and a more positive market mood.
Pound picks up with the US dollar on retreat
Sterling’s reversal from 1.2355 high on Wednesday has been contained right above 1.2200 with the pair pushing higher as the US dollar loses ground following a set of mixed US macroeconomic figures.
The preliminary estimation of the Q1 US Gross Domestic Product has shown a 5% economic contraction, beating market expectations of a 4.8% decline. Furthermore, the weekly jobless claims increased by 2.1 million on the week of May 23 pushing the 10-week total number beyond 40 million. On the other hand, orders for durable goods declined by 17.2%, better than the 19% expected.
The pound, however, remains weighed by market speculation that the Bank of England is considering introducing negative rates while the lack of progress on a trade agreement with the EU is increasing the odds of a no-deal Brexit.
GBP/USD: Breaking through 1.2363 would cancel the downside trend - Credit Suisse
The FX analysts’ team at Credit Suisse see the pound weak on a broad basis yet, above 1.2363 they thing bulls might gain confidence, “Above 1.2281 can see resistance at 1.2326, but with a break above 1.2363 needed to see the downtrend break with resistance then seen at 1.2467 and then more importantly at the April highs and the 200-day average at 1.2643/48 and 1.2668 respectively.”
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