GBP/USD bulls in full control, 2017 highs eyed ahead of US data

Haresh Menghani FXStreet

• DXY tumbles to 4-month lows.
• Shorts run to cover their positions.
• Focus shifts to the key US macro data.

The USD selling pressure remained unabated, with the GBP/USD pair now building on its strong bullish momentum further beyond the 1.3600 handle.

Thursday's downbeat US economic reports, especially an unexpected drop in producer prices, continued weighing on the US Dollar and assisted the pair to build on previous session's sharp recovery move from 1-1/2 week lows.

The up-move got a strong boost during the early European session amid a fresh wave of intense USD selling pressure following a news that German party leaders have reached a breakthrough in coalition talks.

The greenback weakness from the last week of December continued through the early new year, with the DXY plunging to its lowest level since September and driving the pair higher on the last trading day of the week.

The latest leg of upsurge over the past hour or so looks more of a follow-through short-covering move on a sustained trade above the 1.3600 handle.

Next in focus would be the US economic docket, featuring the release of consumer inflation figures and monthly retail sales, which would be looked upon for some immediate USD respite and some short-term trading opportunities.

Technical levels to watch

September 2017 highs, around the 1.3655-60 region now seems to act as immediate strong resistance, above which the pair seems all set to aim towards reclaiming the 1.3700 handle and continue with its near-term upward trajectory.

On the flip side, the 1.3615-10 region now becomes an immediate support to defend and is followed by 1.3585-80 area. Weakness below the mentioned levels might prompt some additional profit taking slide back towards 1.3535-30 support.

Author

Haresh Menghani

FXStreet

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

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD picks up extra pace north of 1.1400

EUR/USD extends its recovery past 1.1400 the figure as the NA session draws to a close on Monday. Indeed, the pair advances for the third straight day amid the persistent offered bias in the US Dollar. Meanwhile, market participants keep gearing up for the ECB Forum in Sintra and the release of critical US labour market data.

Gold bears flirt with $4,000 as Iran tensions and Fed hike bets support USD

Gold remains under some selling pressure for the second straight day on Tuesday, with bears awaiting a sustained break below $4,000 before positioning for deeper losses. Renewed US-Iran hostilities over the weekend cast doubts over the sustainability of the peace deal. This, along with elevated expectations for Fed rate hikes, offers some support to the US Dollar and keeps the bullion within striking distance of the YTD low, touched last week.

Bitcoin stalls at $60K as buyer conviction fades, Strategy authorizes BTC sales

Bitcoin is trading around the $60,000 level on Monday after a sharp decline last week. With the top crypto struggling to recover, analysts suggest the market remains firmly in defensive territory as investors await stronger signs of demand.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.