GBP/USD: Bulls test daily pivot en route 1.3000

Dhwani Mehta FXStreet

The GBP/USD pair jumped back on the bids in the Asian session on the final trading day of the week, as broad based USD recovery appears to have faltered amid latest Trump headlines.

GBP/USD supported above 20-DMA at 1.2925

The major is seen consolidating the overnight recovery from a dip below 1.29 handle, as the bulls gather pace to take-out stiff resistances placed at daily pivot of 1.2960.

The spot derives support from renewed weakness in the US dollar against its main competitors, as markets ignore the latest headlines on the Trump budget proposal, which seems unrealistic. The US President Trump plans to release the Federal Budget coming Tuesday, with deep cuts, tax overhaul and strong growth on the radar.

Trump’s budget will include discretionary spending cuts to education, housing, environment programs

On Thursday, the greenback staged a solid comeback from multi-month troughs on the back of a technical recovery after the recent slide, while a video of former FBI director James Comey hit the wires suggested that there have been no obstructions to investigations by the Trump administration, added to the rebound in the buck across the board.

Hence, the rally seen in cable above 1.3000 on the release of sold UK retail sales data reversed sharply, knocking-off the spot as low as 1.2893. Later today, the spot will continue to get influenced by the USD dynamics and risk trends amid a lack of relevant macro news from both the UK and US.

GBP/USD Levels to consider

A break above 1.2992 (7-month high) could lift the pair above 1.3050 (psychological levels), beyond which a test of 1.3400 (round figure) is imminent. Conversely, a break below 1.2925/21 (20 & 10-DMA), leading to a subsequent break below 1.2872 (May 15 low) is likely to drag the pair towards testing its next support near 1.2842/29 (May 12 & 4 low).

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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