GBP/USD: Will buyers retain control above 1.3400?

  • 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 Forecast 2018: Sterling seen rangebound falling prey to Brexit mood swings

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.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.