- Buy the dips?
- Negative UK stocks, oil prices weigh.
- Awaits US jobless claims, Philly Fed manufacturing index.
The GBP/USD pair extends its bearish consolidative mode into Europe, moving back and forth in a familiar range between 1.3800 and 1.3850 levels amid a lack of fresh catalysts.
GBP/USD supported at 1.3800
The spot returned to the red zone after its recovery from just ahead of the 1.38 handle faltered near the 1.3850 barrier, largely on the back of a renewed uptick seen in the US Treasury yields, which usually dull the attractiveness of the GBP as an alternative higher-yielding asset.
More so, a minor bounce seen in the US dollar versus its main competitors also capped the recovery seen in the major. The USD index is seen reversing a dip to 90.48 levels (session lows) to now trade at 90.56, still down -0.10% on the day. Further, negative oil prices weigh down on the resource-heavy London stocks, collaborating to the downbeat tone seen in Cable.
Also, looming Brexit concerns amid speculation over a second Brexit referendum gathering pace keeps any recovery short-lived. Looking ahead, “in absence of any fresh macroeconomic data from the UK, traders would take cues from the US economic releases - housing market data, Philly Fed Manufacturing Index and weekly initial jobless claims,” Haresh Menghani, Analyst at FXStreet, writes.
GBP/USD Preferred Strategy
Jim Langlands at FX Charts, noted “The momentum indicators generally look positive but Cable remains very headline driven so caution is warranted. Buying dips seem to be the theme though, with an SL placed back below 1.3800.”
Key Levels:
|
Resistance |
Support |
||
|
1.4100 |
Minor |
1.3870 |
Minor |
|
1.4050 |
Minor |
1.3850 |
Minor |
|
1.4000 |
Psychological |
1.3825 |
Minor |
|
1.3975 |
Minor |
1.3785 |
Minor |
|
1.3942 |
Session high |
1.3756 |
Session low |
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