After a brief phase of bullish consolidation in GBP/USD during the overnight trades, the bulls picked-up pace in the Asian trades and rose as high as 1.2786 amid risk-on market profile.
However, the renewed uptick lost legs amid resurgent USD demand across the board, knocking-off the rate to back towards the mid-point of 1.27 handle. The USD index caught a fresh bid-wave to now flirt with two-week tops of 97.55, while Treasury yields gather steam across the time horizon.
The GBP/USD pair witnessed good two-way business a day before, initially dipping to two-day lows of 1.2681 on the back of hawkish Fed-rate hike broad USD rebound. But the spot quickly reversed course and bounced-back to 1.28 handle on the BOE’s monetary policy surprise.
The BOE left its monetary policy settings unchanged, although offered a hawkish surprise after the voting composition saw a 5.-3 vote in the favor of a status-quo, against expectations of 7-1.
Looking ahead, cable could extend the corrective slide, as dust settles over a week full of central banking events, with the greenback better bid ahead of the US housing data, consumer sentiment and LMCI data.
GBP/USD levels to consider
Valeria Bednarik, Chief Analyst at FXStreet noted: “Technically, the pair maintains a neutral stance, given that in the 4 hours chart, the price is hovering around a horizontal 20 SMA, whilst the Momentum indicator turned south right above its 100 level while the RSI indicator turned flat around its 50 level. Investors will likely remain side-lined ahead of Brexit negotiations, set to start next Monday. Support levels: 1.2705 1.2660 1.2635 Resistance levels: 1.2780 1.2830 1.2870.”