The GBP/USD pair is trying hard to extend the recovery above 1.2430 regions, as the bears continue to fight for control amid prevalent risk-off market environment.
The cable was knocked-off to fresh 2-week lows at 1.2392 after the pound met heavy supply pre-Tokyo, as the GBP markets reacted negatively to the weekend’s story reported by the UK Times, citing that the UK PM May and Nicola Sturgeon are preparing to call in a new Scotland independence referendum in March, but only after Theresa May triggers the Article 50.
The British currency emerged the weakest across the fx space in Asia, helping the USD index to keep 101 handle. Adding to the downside in the major, the treasury yields made a comeback from Friday’s declines fuelled by Trump’s lack of clarity on the tax reforms.
Looking ahead, markets will continue to assess the likelihood of another Scottish referendum, which will keep the GBP largely undermined. While the US datasets and Fedspeak could have some impact on the spot ahead of Tuesday’s Trump’s speech before the Congress.
GBP/USD Levels to consider
At 1.2425, the resistances are aligned at 1.2441 (100-DMA) and 1.2460 (5-DMA) and below that at 1.2475 (20-DMA). On the flip side, the supports are lined up at 1.2392 (2-week low) and 1.2371 (daily S1) and below that at 1.2350 (psychological levels).
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