The pound jumped back onto the bids against its American counterpart in mid-Asia, with the bulls now looking to regain 1.30 handle as we head towards early Europe.
GBP/USD finds support just below 10-DMA at 1.2959
The spot extended its overnight declines in early Asia and hit a fresh low of 1.2955 just ahead of Tokyo-open, as the Asian traders reacted to the UK PM May’s comments on the terror attack. Theresa May said that terror threat level raised from "severe" to "critical", suggesting another attack could be "imminent".
The downside was also fuelled by a renewed risk-aversion wave that gripped the Asian markets, after Moody’s cut China credit ratings, with outlook from stable to negative. However, the bulls managed to recover some ground amid a recovery in the Asian indices ex-China, while fresh buying seen around oil prices also offered some respite to the risk-currency cable.
Meanwhile, the greenback remains broadly subdued, consolidating the bullish run witnessed in the US last session, as investors gear up for the FOMC minutes, which is likely to quell doubts on a June Fed rate hike, despite the recent Trump controversy and ‘elementary double count error’ in the Budget.
GBP/USD Levels to consider
Valeria Bednarik, Chief Analyst at FXStreet noted: “Technically, the neutral stance seen on previous updates persist with the 4 hours chart showing that the price keeps hovering around a directionless 20 SMA, whilst the Momentum indicator heads lower, right below its 100 level, and the RSI aims higher around 52, diverging from each other but both lacking strength. Below 1.2890, the pair can extend its decline towards 1.2830, the base of the wider range that will likely keep holding ahead of the big events to come. Resistance levels: 1.3025 1.3060 1.3100.”
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