The GBP/USD pair reverses a knee-jerk downward spike hit near 1.2780 region on the release of a big miss in the UK retail sales data. The prices bounce-back above 1.2800 handle, recovering most losses
The recovery in the spot gains momentum, despite renewed buying interest seen in the US dollar against its main competitors, as markets take profits off the table after latest leg down, ahead of Sunday’s French election.
Moreover, a minor-recovery seen in the GBP/JPY cross also offered support to the GBP, lifting cable back above 1.28 handle.
With the UK data out of the way, the immediate focus now remains on the BOE MPC member Saunders’ speech due to be delivered shortly. Meanwhile, the US economic data, including the PMI reports and existing home sales, will be closely eyed for fresh USD moves.
GBP/USD Levels to consider
Momentum above 1.2851 (Apr 20 high) could lift the pair above 1.2912 (flash rally high), beyond which a test of 1.2950 (psychological levels) is imminent. Conversely, a break below 1.2770 (Apr 20 low), leading to a subsequent break below 1.2758 (5-DMA) is likely to drag the pair towards testing its next support near 1.2730 (classic S2/ Fib S3).