GBP/USD spikes to fresh session tops, 1.31 mark back on sight

Haresh Menghani FXStreet

• The USD continues with its overnight retracement slide from YTD tops.
• Trump’s comments exert some additional pressure on the USD.

The GBP/USD pair reversed a dip to sub-1.3000 level and spiked to fresh session tops around the 1.3080-85 region in the last hour.

The pair built on its overnight rebound from 10-month lows and caught some bids since the early European session, snapping three consecutive days of losing streak.

A follow-through US Dollar retracement on Friday was seen as one of the key factors that helped the pair to recover all of its previous session's losses.

The latest leg of a spike over the past hour or so could be attributed to the US President Donald Trump's comments, via Twitter, expressing displeasure over the Fed's monetary policy tightening.

The greenback was also being weighed down by St. Louis Fed President James Bullard's dovish comments, saying that yield curve inversion is a bearish signal on the economy and the Fed should hold off on hiking further.

Despite a goodish rebound, the pair still seems on track to end in red for the second consecutive week as investors now look forward to the EU’s chief negotiator, Michel Barnier's upcoming meeting with the new Brexit secretary Dominic Raab on Thursday.

Technical levels to watch

A follow-through buying interest has the potential to continue lifting the pair further towards the 1.3100 handle, which if conquered now seems to pave the way for an extension of the recovery move.

On the flip side, the 1.3035-30 region now seems to protect the immediate downside, below which the pair is likely to head back towards challenging the key 1.30 psychological mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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