- DXY on the defensive.
- Risk-on underpins.
- The UK high street lending, US data – key.
The bulls regained poise after the overnight dip, now pushing GBP/USD pair back towards the two-week tops of 1.3430, as we progress towards the early European trading.
GBP/USD finds support just below 1.34 handle
The risk-on sentiment is back in vogue on the back of the recent rally in commodities prices and positive performance on the Asian stock markets, which offered the fresh impetus to the risk currency GBP, driving the rates back above the 1.34 handle.
More so, persistent broad-based US dollar weakness combined with holiday-thinned trading remains supportive of the renewed strength seen around Cable. The USD index stalls its recovery mode and drops back towards 4-week lows of 92.53, despite a positive tone seen around the US rates. It’s worth noting that the reversal in 10-year Treasury yields from multi-month tops is the main driver of the ongoing broad USD weakness.
Markets now await the sentiment on the European markets and the UK Finance mortgage approvals data for fresh trading opportunities ahead of the US jobless claims, Chicago PMI and goods trade balance releases.
GBP/USD Technical Levels
According to Valeria Bednarik, Chief Analyst at FXStreet, “The pair poses a modest positive stance according to technical readings in the 4 hours chart, as the pair is above a marginally bullish 20 SMA, also detaching from the 200 EMA that stands around 1.3340 with a modest upward slope. Technical indicators in the mentioned chart continue lacking directional strength, with the Momentum still around its 100 level, but the RSI indicator holding higher, around 57, this last leaning the scale towards the upside. The pair has multiple relevant highs in the 1.3465 region, a probable top for the upcoming sessions. Support levels: 1.3410 1.3375 1.3340. Resistance levels: 1.3420 1.3465 1.3500.”
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