GBP/USD hits fresh two-month highs and retreats
|The GBP/USD pair was seen building on to its recent near-term recovery trend and touched the highest level since Oct. 4 on Tuesday. The pair, however, has retraced few pips from session peak and is currently trading around 1.2750 region.
Following its initial bearish reaction on Monday, in wake of Italy's no vote to Prime Minister Matteo Renzi’s constitutional reforms proposal in a referendum on Sunday, the pair managed to recover back above 1.2700 handle. Monday's recovery move got an additional boost from stronger-than-expected UK services PMI print, which added on to Friday's upbeat UK construction PMI. The pair, however, struggled to gain further traction and was contained below mid-1.2700s.
On Tuesday, the pair maintained its bid tone for the sixth consecutive session as the US Dollar seems to have stalled its post-US election rally. Market participants have turned cautious and think that the greenback might have run ahead of the fundamentals and hence, focus would remain on next week's FOMC meeting, which would provide fresh clues over possibilities, and timing of next Fed rate-hike action in 2017, and would eventually determine the next leg of directional move for the major.
In the meantime, today's US economic docket, featuring non-farm productivity, trade balance data and factory orders, might provide some impetus for short-term traders.
Technical levels to watch
A follow through buying interest might continue to boost the pair further towards 100-day SMA resistance near 1.2795-1.2800 region, which if cleared should assist it further towards 1.2875-80 strong resistance. On the downside, 1.2700 handle now becomes immediate support to defend, which if broken is likely to drag the pair back towards 1.2610-1.2600 important support with some intermediate support near mid-1.2600s.
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.