GBP/USD bounces-off 1.2770 amid risk-on, BOE Carney eyed

Dhwani Mehta FXStreet

The GBP/USD pair failed several attempts to regain 1.28 handle in early Asia, and now wavers in an almost 20-pips trading range, as persistent US dollar strength across the board keeps the prices in check.

However, the spot manages to find some support from risk-on trades amid positive Asian stocks and oil prices, which buoys the sentiment around the risk currency GBP.

The major is gradually extending its retreat from the multi-month tops reached on Tuesday, in the wake of a GBP flash rally, after the UK PM Theresa May called in snap general election on June 8^th. Markets are confident of May’s Conservative Party victory in the election, which would help strengthen position in EU Brexit talks.

Calendar-wise, we have yet another session of empty UK docket, while investors gear up for the US Philly Fed manufacturing index and jobless claims to gauge next USD moves. However, the main risk event for cable is likely to be BOE Governor Carney’s speeches in Washington later today.

GBP/USD Levels to consider

Momentum above 1.2860 (daily high) could lift the pair above 1.2912 (flash rally high), beyond which a test of 1.2950 (psychological levels) is imminent. Conversely, a break below 1.2773 (daily low), leading to a subsequent break below 1.2750 (psychological levels) is likely to drag the pair towards testing its next support near 1.2706 (5-DMA).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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