GBP/USD retraces gains, turns flat near 1.3240 as DXY gains traction
|- GBP/USD trades in a 30-pip range above the 1.32 mark.
- DXY eases below 94 in the early NA session.
- Market volatility remains low ahead of Thanksgiving holiday.
The GBP/USD pair reached a new daily high at 1.3266 in the first trading hour of the American session but struggled to extend its gains. At the moment, the pair is trading at 1.3240, up only 5 pips on the day.
BoE MPC members didn't deliver any surprises
Earlier in the day, the Bank of England MPC members testified before the Treasury Select Committee (TSC). Commenting on the policy outlook, members reiterated the views from the latest BoE statement as they said they were seeing a modest tightening strategy as appropriate and rising energy prices would push the inflation higher in the short-term. On Wednesday, the UK Chancellor of the Exchequer Hammond is scheduled to deliver his first Autumn budget. BBH analysts think that this could be his first and last budget statement as they argue that he would be vulnerable to a cabinet reshuffle.
On the other hand, the US Treasury-bond yields fell sharply when American traders hit their desks and pushed the DXY back below the 94 mark from its weekly high of 94.08. However, as this drop hadn't been backed by a fundamental development, the index started to erase its losses. After losing as much as 1.5%, the 10-year T-bond yield is now losing only 0.44% while the DXY is flat near the 94 handle following its quick all to 93.80.
The macroeconomic calendar won't be offering any data in the remainder of the day and the pair is likely to remain confined in its daily range above the 1.32 mark.
Technical outlook
The pair could face the immediate support at 1.3200 (psychological level) and a daily close below that level could open the door for further losses towards 1.3150 (100-DMA) and 1.3060 (Nov. 13 low). On the upside, resistances align at 1.3280 (Nov. 20 high), 1.3320 (Nov. 1 high) and 1.3400 (psychological level).
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