Amid a generalized demand for the greenback extending into early Europe, the GBP/USD pair remains heavily offered and now flirts with daily lows of 1.2477, as investors turns their attention towards the upcoming US macro data and the all-important US Healthcare bill vote. The USD index rebounds to 99.81, up +0.22% on the day, having found solid bids near 99.50 region in early Asia.
Moreover, rallying treasury yields amid hawkish comments from FOMC member Kaplan and Kashkari, dampens the demand for the pound as an alternative higher-yielding currency. Further, investors’ sentiment around the British currency remains spooked amid reports “Controlled explosion heard in Westminster”, although by the UK police, reminding of Wednesday’s terrorist attack on Parliament.
Furthermore, BOE policymaker Vlieghe playing down of rate hike in response to higher inflation levels, also weighs down on the spot. Looking ahead, the spot will continue to get influenced by the USD dynamics in light of the US durable goods data, Fed official Evans’ speech and Trumpcare vote.
GBP/USD Levels to consider
Steven Knight, Research Analyst at Blackwell Global Investments Limited explains, “Most of the other indicators are suggesting a return to the mean given that the pair, on the daily time frame, is very definitely trending between the 1.20 and 1.26 handles. This may especially be the case given that the RSI Oscillator is nearing overbought levels.”
“Ultimately, the time has come for a pullback from the Cable given all of the above mentioned factors. Subsequently, expect to see the venerable pair trading below the 1.25 handle with a likely range somewhere around the 1.2430 mark in the days ahead,” he added.
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