GBP/USD eases from multi-month tops, holds above 1.3100 mark


  • GBP/USD shot to 4-1/2-month tops on Friday on the back of sustained USD selling.
  • Profit-taking kicks in amid extremely overstretched conditions on short-term charts.

The GBP/USD pair trimmed a part of its early strong gains and has now retreated around 35 pips from the 1.3145 area, or the highest level since March 9.

The pair prolonged its recent strong bullish momentum witnessed over the five weeks or so and built on the gains further beyond the 1.3100 mark amid the heavily offered tone surrounding the US dollar. However, extremely overbought conditions on short-term charts held investors from placing fresh bullish bets and led to a range-bound price action during the early part of the European session.

The USD bearish pressure remained unabated on the last trading day of the week amid worries that the continuous surge in the new coronavirus cases could undermine the US economic recovery. The greenback was further pressured by the ongoing downfall in the US Treasury bond yields and the impasse over the next round of the US fiscal stimulus – ahead of the expiry of some earlier provisions on Friday.

Given the GBP/USD pair's strong rally of nearly 900 pips from late June swing lows, around the 1.2260-55 region, investors now seemed inclined to take some profits off the table. This, in turn, was seen as the only factor behind the pair's modest intraday pullback, though any subsequent slide might still be seen as a buying opportunity and is more likely to remain limited.

In the absence of any major market-moving economic releases from the UK, the USD price dynamics might continue to play a key role in influencing the pair's momentum. Later during the early North American session, second-tier US economic data will be looked upon for some trading impetus. Friday's US economic docket features the release of Core PCE Price Index, Personal Income/Spending data, Chicago PMI and Revised Michigan Consumer Sentiment.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3114
Today Daily Change 0.0019
Today Daily Change % 0.15
Today daily open 1.3095
 
Trends
Daily SMA20 1.2687
Daily SMA50 1.2558
Daily SMA100 1.2417
Daily SMA200 1.2704
 
Levels
Previous Daily High 1.3103
Previous Daily Low 1.2945
Previous Weekly High 1.2804
Previous Weekly Low 1.2518
Previous Monthly High 1.2813
Previous Monthly Low 1.2252
Daily Fibonacci 38.2% 1.3042
Daily Fibonacci 61.8% 1.3005
Daily Pivot Point S1 1.2992
Daily Pivot Point S2 1.2889
Daily Pivot Point S3 1.2834
Daily Pivot Point R1 1.3151
Daily Pivot Point R2 1.3206
Daily Pivot Point R3 1.3309

 

 

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