GBP/USD fades a bounce above 1.3100, focus shifts to UK data
|- Trade optimism led risk-on drags the dollar broadly lower while Brexit breather underpins the GBP.
- Focus shifts to the UK first-tier macro news – UK jobs, CPI later this week for next direction.
The GBP/USD pair picked up fresh bids on the European open and swung back above the 1.31 handle, printing fresh session tops at 1.3107, before easing back to 1.3095 region, where it now wavers.
The bulls cheered fresh broad-based US dollar weakness induced by a renewed risk-on wave amid the recent trade optimism. Upbeat weekend’s comments by the US Treasury Secretary Mnuchin that the US-China trade talks near the final round. Meanwhile, the EU countries agreed to start trade negotiations with the US last hour.
Traders sold-off the greenback across the board amid risk-on market profile, lifting the Cable from near 1.3080 troughs. The USD index meanders near daily lows of 96.79, down -0.17% on the day.
The renewed uptick in the major can be also attributed to some fresh GBP buying after the UK Foreign Secretary Hunt noted that the Brexit talks with the opposition Labour party were more constructive and detailed than what people expected.
However, the spot remains within last week’s familiar ranges around the 1.31 handle amid a sense of calm on the Brexit front after the EU granted a six-month Brexit deadline extension to the UK and as the UK Parliament recess gets underway this week. Further, the GBP traders eagerly await the key UK first tier-macro releases in Tuesday’s jobs report and Wednesday’s CPI data for placing any directional bets on the spot.
In the meantime, the pair could get influenced by the ongoing UK cross-party Brexit negotiations as the markets look forward to the FOMC member Evans speech and regional manufacturing index from the US due later today.
GBP/USD Technical Levels
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