The GBP/USD pair kicked-off a brand new week on a stronger footing, opening with a 20-pips bullish gap, as investors brace for the central banks’ speeches-dominated week ahead.
GBP/USD: Eyes on 20-DMA at 1.2774
The spot extends its bullish run into a fifth day today, and builds onto Friday’s gains above 1.2750 levels, as risk-off remains in vogue amid a recovery in oil prices and higher Treasury yields.
Moreover, the US dollar consolidates Friday’s sell-off so far this session, which also provide extra legs to the upmove. On Friday, the greenback fell sharply lower against its main competitors on the back of dovish comments from FOMC member Bullard and Mester.
Both the Fed officials suggested that there is no immediate need to tighten policy, given softening US inflation outlook and potential tax and regulatory reforms.
More so, the pound also benefits from a survey conducted by Lloyds, which showed that Business confidence in the UK jumped to an 18-month high of 24%, while comments by the UK’s Brexit Minister Davis also added to the ongoing strength in cable.
Focus now shifts towards the fundamentals, with plenty of macro news due on the cards from both the UK and US later this week, following a data-light economic calendar last week. Next of note for the major remains the UK BBA mortgage approvals \ and US durable goods data due later on Monday.
GBP/USD levels to consider
Valeria Bednarik, Chief Analyst at FXStreet offers key technical levels for the spot: “The price remains below a strongly bearish 20 SMA now at 1.2785, whilst the Momentum indicator remains flat within negative territory and the RSI indicator heads marginally higher around 43. In the 4 hours chart, the price is above a modestly bullish 20 SMA, while technical indicators retreat within positive territory, not enough to confirm a bearish move ahead. Support levels: 1.2665 1.2635 1.2590 Resistance levels: 1.2750 1.2785 1.2830.”
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