GBP/USD breaks higher above 1.2800 as USD slips, Carney in focus

Dhwani Mehta FXStreet

The GBP/USD pair extends its bounce from 1.2770 region and regains 1.28 handle, as we progress towards the European opening bells.

The renewed buying interest seen around cable can be mainly attributed to fresh USD selling, as the US yields take a breather and trim gains across the curve. The USD index drops -0.10% to 99.60 levels, retreating from 99.76.

Also, sustained recovery in oil prices continue to boost the risk sentiment, underpinning the demand for the higher-yielding currency GBP, as investors seek to take the yield advantage.

Forex Today: NZD cheers strong CPI, EUR eyes French election for fresh impetus

In the day ahead, the spot will remain at the mercy of the USD dynamics amid a lack of economic events from the UK docket.

Meanwhile, in the US session, the Philly Fed manufacturing index and jobless claims could also influence the pair ahead of the speeches from BOE Governor Carney and US treasury secretary Mnuchin.

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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