GBP/USD: attempted recovery stalls near 1.30 handle

Haresh Menghani FXStreet

• Renewed USD selling helps stage a modest rebound from 2-1/2 week lows.
• Brexit uncertainties might continue to keep a lid on any meaningful up-move.

The GBP/USD pair held on to its recovery gains through the mid-European session, albeit seemed struggling to build on the momentum further beyond the key 1.30 psychological mark.

A fresh wave of US Dollar selling helped the pair to reverse an early dip to 2-1/2 week lows and recover a part of previous session's steep decline, triggered by news that DUP will back an amendment to make the EU's Northern Ireland backstop illegal.

The uptick, however, lacked any strong following as investors seemed reluctant to place any aggressive bets amid rising speculation of a potential leadership challenge in the UK PM Theresa May’s leadership of Tory Party.

Mario Blascak, FXStreet's own European Chief Analyst writes: “The correction on GBP/USD is seen capped by the psychologically important big figure and the 55-period moving average on a 1-hour chart.”

With Brexit headlines turning out to be an exclusive driver of the sentiment surrounding the British Pound, market participants now look forward to the Bank of England Governor Mark Carney's comments over the current developments of the UK economy for some fresh impetus.

Technical outlook

“After falling sharply on Monday, the GBP/USD is currently in a corrective move higher with the technical oscillators including Momentum, the Relative Strength Index both turning higher in the neutral territory on a 1-hour chart, while Slow Stochastics made a bullish swing higher in the oversold territory,” Mario Blascak further added.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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