GBP/USD re-attempts gains above 1.3500

Sellers continue to lurk ahead of 1.35 handle over the last hours, with the GBP/USD pair now struggling to hold above the last, having found fresh bids near 1.3485 region.

GBP/USD re-takes 5-DMA

The spot regains the bids and takes on the recovery once again above 1.3500, having failed near 5-DMA resistance located near 1.3515 on previous occasions, while the US dollar keeps its corrective slide against its main competitors.

The greenback rallied hard across the board after the FOMC offered fresh signals, suggesting a Dec rate hike and 3 more rate increases next year. This hawkish stance came as a positive surprise for the USD bulls, which sent the USD index to two-week tops.

The downside remains cushioned in the spot, as the pound derives support from the positive sentiment on the European equities, while rising UK Gilt yields across the curve also help keep the upbeat tone around Cable.

Meanwhile, markets paid little attention to the public sector net borrowings data, as they once again remain doubtful whether the latest recovery attempts will be capped by rising demand for the EUR/GBP cross.

Next of note for the major remains the US jobless claims and Philly Fed manufacturing index due later in the NA session for further momentum.

GBP/USD levels to consider             

According to Slobodan Drvenica at Windsor Brokers Ltd.: “Despite hitting fresh low at 1.3452, cable is still holding above lows of past three day’s congestion and pivotal support at 1.3461 (Fibo 61.8% of 1.3148/1.3655 upleg). Long upper wicks of Wed/Tue daily candles weigh on near term action, along with daily RSI which is reversing from overbought territory. Sustained break below 1.3461/52 would trigger fresh bearish acceleration towards 1.3400 (rising daily Tenkan-sen and spark further downside on break here. The pair may stay in prolonged consolidation while 1.3452 support holds.”