GBPUSD: Bulls regain poise, headed to 1.4100 ahead of US data

  • DXY selling remains unabated in Europe.
  • Fresh round Brexit negotiations eyed.
  • Focus on the US data dump.

The GBPUSD pair is seen printing fresh weekly tops of 1.4077, as the broad-based US dollar selling remains the underlying theme so far this Thursday, despite rising Treasury yields.

Wednesday’s mixed US CPI and retail sales data re-ignited concerns over the US economic growth prospects, which could keep the Fed from raising rates 3 to four times this year.

Moreover, Cable also received fresh impetus on the latest headlines citing that the EU is all set for another round of the Brexit negotiations after the EU figured out that the Brexit talks between the UK and the European Commission had advanced sufficiently.

Furthermore, increased expectations of a rebound in the UK’s retail sales volumes last month combined with the risk-on rally in the European equities helped lift the sentiment around the GBP bulls.

The pair now awaits the US macro releases lined up later in the NA session for fresh incentives amid a data-empty UK docket while the broad market sentiment will also play a key role behind the GBP’s moves.

GBPUSD levels to watch

Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers, noted, “Wednesday's close above psychological 1.40 barrier was a bullish signal, with a big bullish daily candle with long tail underpinning. Bullish setup of daily studies supports but still lacking stronger momentum, which could obstruct bulls. Firm break above 1.4066 and 1.4081 (Fibo 61.8% of 1.4277/1.3764) is needed for fresh bullish signal for an extension of recovery leg at 1.3764 (09 Feb low). Broken 20SMA offers immediate support at 1.4021 with 1.40 handle expected to ideally hold and deeper dips to be contained by 10SMA (1.3940) to keep bullish stance intact. Res: 1.4066; 1.4081; 1.4156; 1.4200. Sup: 1.4021; 1.4000; 1.3974; 1.3940.”


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