GBP/USD flirts with 1.2700 amid oil recovery & UK political woes
|The GBP/USD pair is seen struggling hard to extend gains beyond Thursday’s highs reached at 1.2712 levels, as the bulls remain cautious amid ongoing UK political turmoil.
GBP/USD en route 1.2800?
The spot consolidates the Asian recovery from 1.2675 region, fuelled by renewed optimism over the Brexit issue, after the UK PM Theresa May outlined her offer on the EU citizens’ rights post-Brexit. May’s plan was apparently well received by some of the EU leaders.
Moreover, oil prices are seen attempting a tepid recovery, which resulted in a better risk environment across the markets, underpinning the sentiment around the higher-yielding currency GBP.
Despite, the ongoing recovery, GBP/USD remains exposed to downside risks, in the wake of looming political uncertainties over May’s Conservatives Party’s deal with the Democratic Unionist Party (DUP), as revealed by the latest reports, citing that the members of the Democratic Unionist Party in Ireland refused to answer May's calls for 36 hours.
Moreover, markets believe that the ongoing oil-price recovery will steepen the Treasury yield curve, which will boost the US dollar broadly, in turn pushing cable lower.
Meanwhile, markets look past hawkish comments from BOE members Haldane and Forbes, as focus shifts to the US fundamentals including the manufacturing PMI and new home sales data due later in the NA session.
GBP/USD levels to consider
Omkar Godbole, Analyst at FXStreet offers key technical levels for the spot. “Immediate support is seen at 1.2675 (Asian session low), which, if breached, would open doors for 1.2633 (100-DMA) and 1.2589 (June 21 low). On the higher side, breach of resistance at 1.27 (zero levels) would open up upside towards 1.2755 (Apr 21 low) and 1.2769 (May 31 low).“
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.