BOE turns hawkish, will GBP/USD yield bullish break of rounding bottom pattern?

The GBP/USD pair extended its bullish run into a third day today, as the Asian traders cheer the hawkish remarks from the Bank of England (BOE) Governor Carney, while the extension of broad based US dollar sell-off in Asia, also sent the rate sharply higher to print fresh three-month peaks at 1.2976.

GBP/USD: 1.2980 – A tough nut to crack

Over the last hour, the spot failed to sustain at higher levels and retraced a minor portion of the intraday rally, as the bulls continue to face stiff resistances near 1.2980 region that represents the breakout point, beyond which the GBP/USD pair could yield a bullish break of the rounding bottom pattern on the daily sticks. A rounding bottom bullish break opens doors for an extensive rally in cable, with a test of 1.3300 levels on the cards in the short to medium-term.

The renewed upsurge in the major is mainly attributed to a sudden shift in gear towards a more hawkish narrative by the BOE Governor Carney, after he noted at the ECB Sintra conference that a partial withdrawal of monetary stimulus likely to become necessary if the economy improves. 

Further, broad based US dollar weakness extends amid a delay in the Healthcare bill vote and on concerns over the Trump’s administration’s ability to deliver on the promised reforms. At the time of writing, the USD index moved slightly away from frehs8-month lows of 96.51 to now trade around 95.62, still down 0.18% on the day.

The major now awaits fresh economic drivers in the form of the net lending to individual’s data from the UK docket, while the key US final GDP figures will be reported alongside the jobless claims data later in the NA session.

GBP/USD levels to consider             

To the upside, the immediate resistance is the 1.2980 zone (key upside barrier) followed 1.3000 (psychological mark) and then 1.3013 (May 25 high). On the downside, support could be located at 1.2903 (daily pivot), 1.2835 (5-DMA) and 1.2800 (zero figure).