- Rallies on weaker DXY and upbeat UK fundamentals.
- Brexit jitters on the back seat.
- Chart-driven buying?
The GBP/USD pair is seen building on its three-day rally, as the bulls aim to regain the 1.43 handle amid persistent broad-based US dollar weakness and a rally in oil prices.
The latest leg up in the spot is largely backed by the renewed sell-off seen in the US dollar across its main competitors, as the Asian traders react negatively to the US Treasury Secretary Mnuchin’s USD jawboning while subdued Treasury yields also add to bearish bias seen around the buck. The USD index prints fresh three-year lows at 88.86, down -0.16% on the day.
Meanwhile, the pound also remains underpinned by the recent series of upbeat UK fundamentals, especially in the wake of improved public finances, solid industrial orders and higher wages, all of which have overshadowed the looming Brexit jitters.
Looking ahead, “new home sales, the trade balance, and jobless claims are scheduled for release tomorrow - while interesting, these reports are not expected to have a significant impact on the dollar. Instead, the market will be watching the ECB. At this stage, the only trigger for a reversal in current market trends would be central bank rhetoric,” Kathy Lien at BK Asset Management notes. Hence, the major will also close eye the EUR/GBP price-action for any ‘rub-off’ effect on Cable.
GBP/USD Technical Levels
According to Valeria Bednarik, Chief Analyst at FXStreet, “The 4 hours chart shows that technical indicators are easing from extreme levels, but still within the overbought territory, reflecting the ongoing correction rather than suggesting that the rally is over. In the same chart, the price is far above all of its moving averages, with the 20 SMA gaining bullish strength currently around 1.3980. The pair can correct even lower during the upcoming session but bulls will likely resurge on dips, with speculative interest now looking to test the mentioned 1.4460/1.4500 region.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds gains near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.