GBP/USD strongest in Europe, re-takes 1.26 ahead of Fedspeaks

Dhwani Mehta FXStreet

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.”

Sell 39%

Buy 61%

Avg Sell Price 1.2412

Avg Buy Price 1.2395

Liquidity Distribution

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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