GBP/USD takes out 50-DMA hurdle
|All love is lost between the FX markets and the US dollar after Trump’s inauguration speech failed to deliver the policy specifics that traders were looking for.
Consequently, the GBP/USD pair rallied in Asia to print a session high of 1.2426 levels. The 50-DMA is seen at 1.2409 levels.
Unwinding of Trump trade gathers pace
The rise in the GBP/USD pair is partly due to ‘sell the fact’ trade in the USD. The greenback has been ruling the roost ever since Trump won the elections.
The other reason for the retreat in the US dollar is the heightened odds of Trade war between US and China. Trump has not softened his stance on trade and China and reiterated the America first policy during his speech on Friday.
The US and UK data calendar is light, hence the spot remains at the mercy of the Trump/Brexit news flow and the action in the treasury yields.
GBP/USD Technical Levels
Failure to hold above 1.2409 (50-DMA) would open doors for a re-test of 1.2363 (5-DMA), under which the losses could be extended to 1.2302 (Nov 18 low). On the other hand, a break above 1.2433 (Jan 5 high) could yield a rally to 1.25 (psychological level), above which a major hurdle is seen at 1.2546 (100-DMA).
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