GBP/USD re-takes 1.2500 amid subdued USD, awaits House vote

The British pound failed another attempt above 1.25 handle versus its American counterpart in the European session, sending GBP/USD back towards the familiar range around 1.2480 levels, before finding fresh bids to now re-attempt a decisive break above 1.2500.

The spot keeps losses, despite a sharp retreat in the US dollar across the board, with the DXY now reverting to daily lows near 99.50 region, when compared to 99.80 levels seen earlier on the day.  

Cable remains on the back foot as the treasury yields continue to hold gains, despite diminishing demand for risk currencies. Moreover, monetary policy divergence between the Fed and BOE comes back to the fore, after the BOE policymaker Vlieghe played down rate hike chances, in response to higher inflation levels. Meanwhile, the Fed officials continue to maintain a case for 2 or 3 more rate hikes this year.

Next of note for the major remains the FOMC member Evans’ speech scheduled ahead of the US durable goods data and Trumpcare vote. Meanwhile, markets appear to ignore downbeat UK BBA mortgage approvals data.

GBP/USD Levels to consider            

Slobodan Drvenica at Windsor Brokers Ltd explains, “Strong overall bullish stance was boosted by Thursday’s close above 1.2476 (Fibo 61.8% of 1.2704/1.2107 downleg), keeping targets at 1.2563/69 (Fibo 76.4% of 1.2704/1.2107 / 24 Feb high) in near-term focus. Overbought slow stochastic on daily chart suggests that correction may extend, but no firmer bearish signal seen so far. Broken 100SMA (1.2412) and top of daily cloud (1.2404) mark strong supports which are expected to contain extended dips.”