GBP/USD catches fresh bids, re-attempts 1.3050 post-UK data

GBP/USD attempted another to take on post-NFP recovery above 1.3060 levels, following the release of better-than expected UK Halifax HPI data, but in vain, as the USD buyers continue to lurk on the back of Friday’s outstanding US labour market report.

GBP/USD finds support near 1.3035 levels

The spot extended its Asian side-trend into Europe on Monday, consolidating Friday’s steep losses incurred after the US dollar rallied hard across the board, following the releases of upbeat US payrolls, wages and jobless rate data. The US dollar rebounded broadly in sync with Treasury yields on increased odds of a Dec Fed rate hike, fuelled by solid payrolls.

However, the GBP/USD pair is seen struggling near mid-1.30s, despite upbeat UK Halifax HPI, as the latest reports of controversy surrounding the UK prepared to pay EUR 40 billion divorce bill, weigh down on the pound, while a renewed risk-aversion wave gripped the European markets amid falling oil prices, which further hurt the sentiment around the higher-yielding currency GBP.

Focus now shifts towards the US LMCI data and Fedspeaks for fresh impetus to the USD bulls, which would drive fresh moves in Cable.

GBP/USD levels to consider             

Karen Jones, Analyst at Commerzbank noted: “GBP/USD charted a key day reversal last week from the 50% retracement at 1.3255 and has now severed its near term uptrend: With such a strong rejection from the Fibo resistance seen, we continue to suspect that 1.3267 was the end of the move. The 1.3077/1.3049 band of support (uptrend, May high and 20 day ma) has been eroded and we have a 13 count plus divergence. Failure here would imply losses to the support circa 1.2775/50 (December 2016 high) and the uptrend at 1.2682.”