GBP/USD eyes 1.2850 as Trump’s Fed criticism overshadows Brexit uncertainty
|- Pound‘s corrective upside extends on US dollar weakness post-Trump’s comments.
- Looks to track USD dynamics ahead of UK datasets, as Brexit jitters take a back seat.
The GBP/USD pair extends its recovery from thirteen-month lows of 1.2662 into the fifth day today, with the bulls now looking to regain the 1.2850 barrier heading towards the European session.
The latest leg higher in the spot can be mainly attributed to the ongoing decline in the US dollar versus its main competitors, in response to Trump’s reiteration of his displeasure at the Fed’s rate hike policy.
Meanwhile, the higher-yielding Sterling also takes advantage of the risk-on market environment, as the Asian stocks advance on hopes trade tensions between the US-China may ease. The focus now remains on the lower-level trade talks due to start this week between the two superpowers.
Also, the GBP trades look forward to the releases of the first of a series of notices on how to deal with a hard Brexit later this Thursday. However, the next big event risk for the major remains the Fed’s monetary policy meeting minutes due tomorrow at 1800 GMT.
In the meantime, the UK public sector net borrowing and CBI industrial orders data will offer some trading momentum to the pair.
GBP/USD Technical Levels
FXStreet’s Chief Analyst, Valeria Bednarik, notes: “The pair is short-term positive according to readings in the 4 hours chart, although Brexit jitters continue to be a major drag for the Sterling with not much room to the upside. In the mentioned chart, technical indicators have entered the positive territory, the Momentum lagging but the RSI advancing at 60, as the price managed to extend its advance beyond a still directionless 20 SMA. The main resistance now is the high set last August 14 at 1.2826, as above the level the positive momentum will likely prevail.”
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