The offered tone behind the US dollar gathered pace in the European session, now pushing the GBP/USD pair back above 1.30 handle.
GBP/USD: Bulls eye 8-month tops of 1.3048
The spot finally broke the Asian consolidation box to the upside on the European open, and rallied hard to rise back above 1.3000 - key psychological levels, largely on the back of resumption of recent US dollar sell-off across the board, after a temporary reversal seen a day before.
The safe-haven demand for the buck got buried amid resurgence of risk-on moods, triggering aggressive selling in the greenback against its main peers. Meanwhile, increased cautiousness ahead of Comey’s testimony and Trump’s Budget release next week, also weighs down on the US currency.
Trump’s budget will include discretionary spending cuts to education, housing, environment programs
Additionally, the risk currency GBP benefits from the oil-price rally, which boosted the European stocks and hence, overall market sentiment. Oil rallied after headlines hit the wires that the OPEC panel is considering scenario of deepening, extending oil supply cut to lower inventories.
Focus now shifts towards the UK CBI industrial orders, the only economic data lined up for release today, as the US docket remains absolutely data-dry.
GBP/USD Levels to consider
Karen Jones, Analyst at Commerzbank noted: “GBP/USD’s near term outlook is positive: Sterling has broken above the 55 week ma at 1.2941, and the 1.30 psychological resistance, But was stopped in its tracks by 1.3060 the 29th September high. The new high has not been confirmed by the RSI and the market is likely to ease back/consolidate.
While above 1.2776/58 and upside bias remains for scope to the 1.3443 September 2017 high.”
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