GBP/USD taps 1.2700 handle ahead of ECB decision

Haresh Menghani FXStreet

The GBP/USD pair extended recovery momentum from yesterday's weekly low and retested 1.2700 handle ahead of ECB monetary policy decision.

Currently hovering around 1.2700 handle, spot accelerated up-move and reversed all of its losses recorded in the previous trading session amid renewed greenback weakness. In fact the overall US Dollar Index extended its weekly corrective slide and has now broken below 100.00 mark.

Market players now eagerly await for arguably this week's top event risk, ECB monetary policy decision, which would drive broader market risk sentiment and the spillover effect would provide fresh impetus for the major.

Later during NA session, the usual weekly jobless claims data would also be looked upon for short-term trading opportunities, but is likely to be overshadowed by ECB-led volatility in the FX market.

Technical levels to watch

A follow through buying interest above 1.2700 handle has the potential to continue boosting the pair initially towards 1.2730 horizontal resistance en-route two-month highs resistance near 1.2775 region, also coinciding with 100-day SMA. On the downside, renewed weakness below 1.2670-65 area is likely to drag the pair back towards 1.2600 handle with 1.2625 level acting as intermediate support.

Sell 33%

Buy 67%

Avg Sell Price 1.2429

Avg Buy Price 1.2528

Liquidity Distribution

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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