The GBP/USD pair witnessed a freak downward spike to near 1.2540 region in early Europe, and from there staged a solid comeback to now trade near daily tops reached just shy of 1.26 handle.
Cable jumps back on the bids, as the bulls remain unperturbed by a cautious tone seen around the London stocks and resurgent USD demand across the board, as investors brace for the historic triggering of the Article 50 tomorrow.
The latest leg higher in the GBP/USD pair can be also attributed to the extension of the rebound in oil prices, which adds to the renewed risk-on wave seen around the financial markets across Europe.
Next of note for the major remains the US goods trade balance, consumer confidence, and Richmond manufacturing index, while a flurry of speeches from the FOMC board members will hold the key for fresh USD moves.
GBP/USD Levels to consider
Slobodan Drvenica at Windsor Brokers Ltd explains, “Sustained break above 1.2568/80 triggers is needed to open way towards targets at 1.2689 (falling 200SMA) and 1.2704 (02 Feb high). Dips were so far shallow and held by initial support at 1.2550 zone, however, deeper correction cannot be ruled out. Rising daily cloud offers strong support at 1.2420, reinforced by ascending daily Tenkan-sen, which should contain extended downticks.”
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