The GBP/USD pair stalled its gradual recovery mode just shy of 1.22 barrier and retreated sharply to test daily troughs as the greenback picked-up significant strength across the board.
GBP/USD awaits manufacturing & industrial figures
The cable has been caught by fresh sellers that lurked near 1.22 handle, despite a recovery in risk-sentiment, as the spot closely tracks the USD price-action. The latest leg higher in the US dollar versus its main competitors is on the back of renewed bids seen in the US treasury yields, as markets re-price in rising inflation expectations amid higher fiscal spending ahead of Trump’s new conference scheduled later today
While the bearish bias remains intact as the UK PM May’s comments pointing towards a Hard Brexit scenario continue to weigh on the pound, especially ahead of next week’s Supreme Court hearing on the Brexit process.
However, auspicious manufacturing and industrial production data due on the cards in the European session could provide some much-need respite to the bulls, sending the rate back above 1.2200 levels.
GBP/USD Levels to consider
In terms of technical levels, upside barriers are lined up at 1.2200 (round figure), 1.2250 (psychological levels) and 1.2281 (20-DMA). While supports are seen at 1.2123 (daily S1) and 1.2100 (multi-week lows) 1.2050 (psychological levels) and below that at 1.2000 (key support).